inside news_septe… · learnership is outcomes-based and not time-based and allows for recognition...

1SEIFSA NEWS | SEPTEMBER / OCTOBER 2017

THE 3RD SOUTHERN AFRICANMETALS AND ENGINEERING INDABA

WAS A RESOUNDING SUCCESS

ADDRESS BYMINISTER OF LABOUR

MILDRED OLIPHANT

THE NATIONALDEVELOPMENT

PLAN (NDP)

OPENING ADDRESSBY MINISTER OF

ECONOMICDEVELOPMENT

EBRAHIM PATEL

INSIDE:

NEWSS E I F S A

SEPTEMBER / OCTOBER 2017

2 SEIFSA NEWS | SEPTEMBER / OCTOBER 2017

LEADERS IN CLOSING THE SKILLS GAP

merSETA Social @mersetasocial www.merseta.org.zaw

WE CAREIt’s about caringfor people werender services to

WE BELONGIt’s about workingtogetherwith colleagues

WE SERVEIt’s about goingbeyond thecall of duty

What is a learnership?

A learnership is a structured learning process for gaining theoretical knowledge through an accredited training provider and practical skills in the workplace leading to a qualification registered on the NQF. A learnership is outcomes-based and not time-based and allows for recognition of prior learning. Learnership duration varies but the average is about 12 months.

Who is eligible to enter a learnership programme?

Any person, employed or unemployed, may apply to register for a learnership:

If you are employed, you may register for a learnership programme Ÿwithin the sector where your company or organisation operates; or

If you are unemployed, you may register for placement in a learnership Ÿprogramme at your local labour centre or with employers in your area.

The Department of Labour refers unemployed individuals, who meet the minimum criteria, to employers looking for learners.

How does one apply for a learnership programme?

If you are employed, find out which learnerships are available in the Ÿsector in which you work. Upon deciding which learnership programme is appropriate, you will need to enter into an agreement with your employer stating your rights and responsibilities as a learner; or

If you are unemployed, you must register your profile at the nearest ŸDepartment of Labour office, after which you may be referred to employers who may be looking for learners to enter learnership programmes.

What is an apprenticeship?

The apprenticeship system is a well-known technical training system, which covers both practical and theoretical components offered in listed trades. Once you have completed your training, you will need to pass a trade test to qualify as an artisan.

Who is eligible for an apprenticeship programme?

Any South African citizen, 16 years or older. There are different admission requirements for the various trades. Competence in Maths, Science and English will enhance your chances of selection.

How does one apply to enter an apprenticeship programme?

If you are unemployed, you may apply to a company that is offering an Ÿapprenticeship programme; or

If you are employed, consult with your employer as to the requirements Ÿand correct procedures to be followed to enter an apprenticeship programme.


PublisherSteel and Engineering Industries Federation of Southern Africa (SEIFSA)

AdvertisingThabo Rammutla | [email protected](011) 298-9455

EditorJackie MoloseTel: (011) 298-9411 | Fax: (011) 298-9511E-mail: [email protected] PO Box 1338 | Johannesburg, 2000

Design and layoutZandile NgubeniTel: (011) 298-9421E-mail: [email protected]

ISSN - 1560 - 9049

CONTENTSSeptember / October 2017

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Circulation:2 500 (Not certified)Opinions expressed in the articles do not necessarily reflect the views of SEIFSA. Similarly, advertising in this publication does not imply endorsement or approval of any such products or services by SEIFSA. While every attempt is made to ensure the accuracy and correctness of the information contained in this publication, SEIFSA accepts no liability for any losses or damages sustained through the use thereof. Articles may only be reproduced with permission.

AdvertorialsWhen a company logo appears with an article, it indicates that the article has been commissioned by the company.

SEIFSA News is an exclusive membership benefit.

SEIFSA News is distributed free of charge to all members in the metal and engineering industry. It is also available on an annual subscription basis to members requiring more than one copy.

6 issues published annually.

Members – 1 free issueAdditional copies – R22.37 per issue (incl VAT)Non-members – R239.63 per annum (incl VAT)

Prices valid from 1 July 2017 until 30 June 2018.

Subscriptions July Malakoane Tel: (011) 298-9418E-mail: [email protected]

COVE

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COVE

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TORY

The 3rd Southern African Metals and Engineering Indaba was a resounding success

Address by Minister of Labour Mildred Oliphant

The National Development Plan (NDP)

THE 3RD SOUTHERN AFRICANMETALS AND ENGINEERING INDABA

WAS A RESOUNDING SUCCESS

ADDRESS BYMINISTER OF LABOUR

MIDRED OLIPHANT

THE NATIONALDEVELOPMENT

PLAN (NDP)

OPENING ADDRESSBY MINISTER OF

ECONOMICDEVELOPMENT

EBRAHIM PATEL

INSIDE:

NEWSS E I F S A

SEPTEMBER / OCTOBER 2017 “[The Southern African Metals and Engiineering Indaba] was an exceptionally well-organized event. The quality of topics and presenters indentified was top class and it was a pleasure for BUSA to participate in such an event.”

Tania Cohen BUSA CEO

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Political Leadership and Economic Growth

Continental Free Trade Agreement

The Automotive Production and Development Programme

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INDU

STRY

NEW

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Two Crane Giants join forces

SEIFSA Interns

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Gloomy days await SA despite green shoots

Career Readiness Programme

The impact of steel import tariffs on SA economySA Brics Membership DI

VISI

ON N

EWS

Collaborating to bring large and small businesses together

Seeking Exemption from Paying Leave Enhancement Pay


cEO’S dESk

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Now in its third year, the conference was born out of the need to arrest and eventually reverse the ongoing decline of manufacturing in general and the

metals and engineering sector in particular. According to the South African Reserve Bank, the manufacturing sector is 29% larger today than 10 years ago, 66% larger than 20 years ago and 71% larger than 30 years ago. However, its share of the economy declined first from 20% in 1983 to 19% in 1993, and then further still to 18% in 2003, 16 % in 2013 and now around 13%.

Manufacturing exports represent an estimated 35% of production, while imports have captured nearly 45% of the domestic market. On the other hand, the metals and engineering sector exports 60% of its products and competes with imports for 60% of the domestic market.

FROM THE cHIEF EXEcUTIVE OFFIcER’S dESk

Kaizer Nyatsumba

The Third Southern African Metals and Engineering Indaba – which featured very senior and high-profile business executives, labour leaders and Government representatives on the programme – took place at the Idc conference centre on 14-15 September 2017. All these men and women had in common was a desire to change South Africa’s fortunes and to make the country a success.It is not easy

to have such revered, high-calibre individuals in one room to discuss matters that deeply concern manufacturing in general and the metals and engineering sector in particular.

5SEIFSA NEWS | SEPTEMBER / OCTOBER 2017 5

Yet again, the Southern African Metals and Engineering Indaba offered all stakeholders – business executives and captains of industry, policy makers and Government Ministers, as well labour leaders – a vital opportunity to discuss matters of common interest calmly, robustly and yet constructively in order to improve the performance of the sector and grow the economy.

Although a detailed report on the Metals and Engineering Indaba 2017 is carried in this issue of our magazine, it is worth pointing out here that among the speakers at this year’s conference were very senior business, labour and Government representatives like:

• Economic Development Minister Ebrahim Patel;• Labour Minister Mildred Oliphant;• National Association of Automobile Manufacturers of

South Africa Director Nico Vermeulen;• National Association of Automotive Components and Allied

Manufacturers (NAACAM) Director Renai Moothilal; • Business Unity South Africa (BUSA) CEO Tanya Cohen;• Business Leadership South Africa (BLSA) CEO Bonang

Mohale;• Southern African-German Chamber of Commerce and

Industry Chief Executive Officer Matthias Borddenberg• Bowmans Gilfillan Partner Graham Damant;• Department of Labour Chief Director Thembinkosi Mkalipi;• NUMSA General Secretary Irvin Jim; • Solidarity General Secretary Gideon du Plessis;• International Trade and Administration Commission Chief

Commissioner Siyabulela Tsengiwe;• Voith Turbo Managing Director Charl Folcher • Massmart Chairman Kuseni Dlamini;• ANC Treasurer-General and Former KwaZulu-Natal

Premier Dr Zweli Mkhize; and• Many others of similar pedigree.

It is not easy to have such revered, high-calibre individuals in one room to discuss matters that deeply concern manufacturing in general and the metals and engineering sector in particular. Their inputs and debates were of the highest level, with participation by and questions from the delegates being equally good.

It was, by all accounts, a very successful conference. In a subsequent e-mail, BUSA CEO Tanya Cohen wrote: “Thanks to SEIFSA for the opportunity [to speak at the conference]. It was an exceptionally well organised event. The quality of topics and presenters identified was top class and it was a pleasure for BUSA to participate in such an event.”

Perhaps we can count on you, dear reader, also making an effort to be part of the Indaba in its fourth year in 2018?

For three years in a row now, we have enjoyed great support from some of South Africa’s leading companies, which

have been among our sponsors from the very beginning. Some of them joined us in the second year. These are MerSeta, Standard Bank, Investec, Novare, Sanlam, SMS Group and Africa Steel Holdings. We are infinitely grateful to them and look forward to a growing partnership in the years to come.

We have also enjoyed a fantastic media partnership with Engineering News, finweek and Independent Newspapers. In the past two years, we have been involved in an invaluable partnership with the Industrial Development Corporation, which has been so crucial over the years in South Africa’s industrial development. We are immensely grateful to all these partners and hope that they will continue to support us in the years to come.

For more details on the Indaba and on opportunities to become one of our sponsors/partners in future, please, visit www.meindaba.co.za.

Kaizer M. NyatsumbaChief Executive Officer

Yet again, the Southern African Metals and Engineering Indaba offered all stakeholders – business executives and captains of industry, policy makers and Government Ministers, as well labour leaders – a vital opportunity to discuss matters of common interest calmly, robustly and yet constructively in order to improve the performance of the sector and grow the economy.

‘


cOVER

The third annual Southern African Metals and Engineering Indaba was held at the Industrial Development Corporation (IDC) Conference centre in Sandton on 14-15 September.

THE 3Rd sOuTHERn aFRican METals and EnginEERing indaba wAS A RESOUNdINg SUccESS

Organised by the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), the annual Indaba was born out of concern about

the poor performance of the metals, engineering and related sectors in particular and manufacturing in general and brings together leaders from business, labour and government and other interested parties to deliberate on ways to stimulate manufacturing.

Building on the success of the previous two conferences, this year’s Indaba had an impressive line-up of speakers who addressed the delegates and shared their expertise on a wide

range of topics during the plenary and break-away sessions.

cONFERENcE ScOPE

The 2017 Southern African Metals and Engineering Indaba included sessions on:

• Political Leadership in Southern Africa: Does it Advance or Hamper Economic Growth?

• The Continental Free Trade Area: A Reality Before The End of 2017?


MinisterEbrahim Patel

• Winning Together: Can Government, Business and Labour Conclude a Social Compact in the interest of Labour Stability and Foreign Investment?

• The Automotive Production and Development Programme and the South African Metals and Engineering Sector

• Do Steel Import Tariffs Benefit or Hurt the South African Economy?

wELcOME ANd OPENINg AddRESSES

In his Welcome Address, Minister of Economic Development Ebrahim Patel highlighted a number of factors affecting the sector. These included changes in the commodity demand cycle, a domestic economy that has just emerged from a shallow recession, a sovereign rating downgrade as well as serious concerns about governance at key public enterprises.

In order to navigate the challenges and to seize opportunities, he called for a new national deal with at least four components – a credible growth story that places emphasis on sectors with higher growth potential, integrity in governance and decision making, transformation, as well as prudent fiscal management that inspires confidence.

Mr Patel told the conference of the various steps the government had taken to support the metals and engineering sector. These included industrial funding, local procurement, beneficiation and actions against cartels, transformation and collusion, as well as connecting people with opportunities.

In a no-holds-barred Opening Address, African National Congress (ANC) Treasurer-General Dr Zweli Mkhize dealt with a number of factors in South African politics, including the allegations of systematic and well-orchestrated corruption through the so-called State capture. Dr Mkhize is one the six most senior officials in the ANC and has been tipped as a possible contender for the ANC Presidency position in the organisation’s December national conference.

He called for swift establishment of a judicial commission of inquiry to investigate the allegations of State capture. Such an inquiry would put to rest speculation about the nature and extent of State capture, he said.

“There is a need for a new national deal”“Government has taken various steps to support the metals and engineering sector”“These included industrial funding, local procurement, beneficiation and actions against cartels”


In this session, Mapungubwe Institute for Strategy Reflection (MISTRA) CEO Joel Netshitenzhe, ANC Member of Parliament Dr Makhosi Khoza and

Independent Director of Companies Dr Mamphela Ramphele discussed the extent to which political leadership in Southern Africa either advances or hampers economic growth. They challenged labour, business and other social partners to be vigilant against corruption in government. The session also put the spotlight on deficits in political leadership as well as the slow pace of the implementation of government policies.

In her presentation, Dr Ramphela dealt with, among others, the shortcomings of post-liberation leadership in Africa, which she said had failed to deliver on the promises of freedom. She lamented the failure to complement the political settlements with emotional and socio-economic settlements.

cOVER

POLITIcAL LEAdERSHIP ANd EcONOMIc gROwTH

They challenged labour, business and other social partners to be vigilant against corruption in government‘Joel Netshitenzhe

“Business, labour and other social partners should work together to punish those involved in corruption and state capture”

“There are very rational ideas about how to ignite growth, how to eliminate weaknesses in state-owned enterprises, how to ensure close cooperation among social partners and corruption and state capture”

“In the South African context, there is no shortage of visions,policies and rational articulation of what needs to be done. The challenge is with implementation”


EnsuRing COMPETITIVE MANUFACTURING in sOuTHERn aFRica

In this session, Manufacturing, Engineering and Related Services Sector Education and Training

Authority (merSETA) CEO Dr Raymond Patel, Deloitte Managing Director for Emerging Markets Africa Dr Martyn Davies, Africa House Director for Projects and Development Finance Paul Runge, Aurik Business Accelerator CEO Pavlo Phitidis and IDC Senior Industry Development Manager for Machinery & Equipment SBU Ganief Bardien discussed the steps that policy makers, business and labour need to take in order to ensure that manufacturing is internationally competitive.

In their session, the various speakers emphasised the need to address various factors threatening competitiveness. These, according to Dr Patel, included the persistence of special inequality, human resources inequality, economic inequality, low productive capacity, skills shortage, lack of access to finance as well as outdated technology.

Dr Raymond Patel

“The is a need to address various factors threatening competitiveness. These include the persistence of special inequality, human resources inequality, economic inequality, low productive capacity, skills shortage, lack of access to finance as well as outdated technology. ”


cOVER

cOnTinEnTal FREE TRAdE AgREEMENT

The long-awaited Continental Free Trade Agreement is expected to unlock enormous opportunities for manufacturers because it

will create a single market for goods and services in the continent. The Continental Free Trade Agreement is an opportunity for African countries to improve intra-regional trade and reduce the reliance on exporting raw materials. Claudia Furriel, a Director at the Department of Trade and Industry, Africa House Director Duncan Bonnett and Professor Colin McCarthy of the University of Stellenbosch weighed in on the progress made in the implementation of the free trade agreement and its implications for manufacturing in Southern Africa.

Discussions in this session focused on the importance of intra-African trade. In South Africa’s case, neighbouring countries such as Lesotho account for a significant share of the country’s international trade, hence the urgency of a free trade agreement to further enhance intra-African trade.

By the end of the session, it was clear that the end-of-2017 deadline is ambitious, given the sheer scale and complexities involved in negotiating a single rule book for the trade of goods and services. Department of Trade and Industry Trade Director for African Union Claudia Furriel said: “History will tell us that it is not really possible to conclude a CFTA in a year-and-a-half.”

Claudia Furriel

“History will tell us that it is not really possible to conclude a CFTA in a year-and-a-half.”


SOcIAL cOMPAcT FOR labOuR sTabiliTY and inVEsTMEnT

Amid slow economic growth and rising unemployment, very few can argue against

the need for closer cooperation between the government, business and labour. But the question is whether such cooperation in the form of a social compact would result in much-needed labour market stability and foreign investment. Grappling with this question and others were Director of the Centre for the Study of Democracy at Rhodes University Professor Steven Friedman, Southern African-German Chamber of Commerce and Industry CEO Matthias Borddenberg and Business Unity South Africa (BUSA) CEO Tanya Cohen.

According to SEIFSA Operations Director, Lucio Trentini, South Africa will not progress if there is an adversarial relationship among key social partners.

Lucio Trentini

“South Africa will not progress if there is an adversarial relationship among key social partners.”

11SEIFSA nEWs | sEPTEMbER / OcTOBER 2017


In this session, major players in the South African automotive industry lauded the success of the Automotive Production and Development Programme

(APDP), saying it had contributed to the resilience of the sector.

The different speakers agreed that the APDP had a positive impact on vehicle production. Renai Moothilal of the National Association of Automotive Components and Allied Manufacturers said the APDP was a success despite difficult global economic conditions. National Association of Automobile Manufacturers of South Africa (Naamsa) Director Nico Vermeulen said the automotive industry had grown significantly since 2000. He said the industry represented one-third of all manufacturing in South Africa: “The industry is heading for a million vehicles produced in this country, the bulk of which will be exported, within the next four to five years.”

However, speakers on the panel were not able to talk convincingly about the benefits that have accrued to the metals and engineering sector, in terms of supplying to auto manufacturers, as a result of the considerable Government subsidy to auto manufacturing through the APDP.

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THE AUTOMOTIVE PROdUcTION ANd dEVELOPMENT PROgRAMME and THEsOuTH aFRican METals and EnginEERing sEcTOR

APDP was a success despite difficult global economic conditions‘

Nico Vermeulen

“The industry is heading for a million vehicles produced in this country, the bulk of which will be exported, within the next four to five years.”


THE FuTuRE OF CENTRALISED COLLECTIVE BARGAINING

The future of South Africa’s centralised collective bargaining system came under the spotlight

at this session. This is against the backdrop of criticism of the system from certain quarters. The question was whether collective bargaining may take a different form in future and, if so, what that form would look like. It was against the backdrop of national collective bargaining being criticized as resulting in a one-size-fits-all outcome which ends up being extended to non-parties.

Mr Trentini said he expected the recently-concluded, three-year wage deal to be contested by non-parties.

The different speakers emphasized that, despite the legal challenges, the collective bargaining model was well entrenched andunlikely to be removed. Mr Trentini warned against collapsing the centralized bargaining model without coming up with an acceptable, well-thought-out and viable alternative model acceptable to all stakeholders.

National Union of Metalworkers of South Africa (Numsa) General Secretary Irvin Jim and Bowmans Gilfillan Partner Graham Damant also warned about dire consequences if centralised collective bargaining collapsed.

However, Department of Labour Chief Director Thembinkosi Mkalipi blamed the mushrooming of employer bodies for the threats to collective bargaining.

“There will be dire consequences if centralised collective bargaining collasped.”


Irvin Jim


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THE IMPAcT OF STEEL IMPORT TARIFFS On THE sOuTH aFRican EcOnOMY

The local steel industry has come under immense pressure from subsidized and cheaper imports from China. This has prompted SEIFSA and

other stakeholders, including organized labour, to urge the Government to take decisive steps to protect the local sector in the form of tariffs.

The big question in this session was whether the steel import tariffs benefit or hurt the South African economy. Chamber of Mines Chief Economist Henk Langenhoven raised the dilemma of rising international prices while demand in South African was stagnant. Steel prices for specific products are linked to international prices.

In 2015 and early 2016, the International Trade and Administration Commission (ITAC) increased import tariffs on primary steel from 0% to 10%. This, according to ITAC Chief Commissioner Siyabulela Tsengiwe, was in response to a change in the global market which led to an oversupply of steel and increased imports into South Africa.

Siyabulela Tsengiwe

“ In 2015 and early 2016, the International Trade and Administration Commission (ITAC) increased import tariffs on primary steel from 0% to 10%.”


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In December 2010 South Africa became a member of BRICS. The question at this session was whether South Africa’s membership of BRICS has delivered

tangible economic benefits for the country. South African Institute of International Affairs Researcher Cyril Prinsloo said there had been significant trade among the BRICS countries.

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SOUTH AFRIcA’S BRIcS MEMBERSHIP

“Has South Africa benefitted commercially from BRICS? The simple answer is yes,” he said, citing significant trade among the BRICS countries.

‘Sello Rasethaba

“South African businesses should take advantages of the BRICS alliance by exporting manufactured goods to BRICS countries such as China.”

“Has South Africa benefitted commercially from BRICS? The simple answer is yes,” he said, citing significant trade among the BRICS countries.

Mr Prinsloo said South Africa’s exports to fellow BRICS members were mainly raw materials such as iron, coal and chrome, while imports were mainly manufactured goods. Speaking in his capacity as the Chairman of the South African BRICS Business Council Financial Services Working Group, Sello Rasethaba urged South African businesses to take advantages of the BRICS alliance by exporting manufactured goods to BRICS countries such as China.


addREss bY MINISTER OF LABOUR

Minister of Labour Mildred Oliphant said she would not allow a review of South Africa’s

labour relations laws in order to introduce flexibility in the hiring and firing of workers.

Ms Oliphant commented on the country’s labour market policies. “Most workers consider the post-apartheid labour dispensation as their revolutionary victory, while capital is calling for flexibility. There is an obsession that South Africa’s labour market policies impede job creation,” she said.

Ms Oliphant spoke against suggestions that the country’s labour relations legislation should be amended in order to accommodate flexibility in respect of firing and hiring.

“Let me say this from the onset – it is not happening. As long as I am still deployed at Minister of Labour, I will not allow that particular clause,” she said.

MinisterMildred Oliphant

“Most workers consider the post-apartheid labour dispensation as their revolutionary victory, while capital is calling for flexibility. “


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RElaTiOnsHiP bETWEEn BIg ANd SMALL BUSINESS IN MANUFAcTURINg

This was one of two break-away sessions at the conference. Panelists in this session critically reviewed the state of relations between big

and small employers in manufacturing in general and the metals and engineering sector in particular. They looked at the degree to which the employers complement each other. Africa Steel Holdings CEO Mayleen Kyster attested to the collaboration between small and big employers. Ms Kyster, an entrepreneur in the sector, gave testimony of her own journey in the male-dominated industry.

“One needs to understand that, even though black economic empowerment has good intentions, the reality is that we are in a capitalist market and business wants to make money. This is not a charity opportunity,” she said.

She was emphatic that the relationship between big and small businesses would never be parasitic if one knew what one wanted to gain in the transaction. By collaborating with their bigger counterparts, small businesses can increase revenue and decrease costs because of access to big distribution channels and footprint.

Another entrepreneur, William Dhlongolo, CEO of ISiYalu Manufacturing, also spoke about the growth of his own business, which is in its sixth year. He highlighted the importance of government-initiated incubation programmes to the development of SMMEs.

Mayleen Kyster

“One needs to understand that, even though black economic empowerment has good intentions, the reality is that we are in a capitalist market and business wants to make money. This is not a charity opportunity,”


RATINgS dOwNgRAdE

Panellists in the second break-away session grappled

with the implications of South Africa’s junk status credit rating and, secondly, what needs to be done to regain the country’s sovereign credit investment rating.

Makhaya Advisory South Africa CEO Trudi Makhaya said the country should focus on establishing a stable, healthy, societal base able to leverage regained ratings levels. Instead of an “obsession” with the credit ratings, the country should deal with the internal structural issues that contributed to the downgrade. These included the high rates of poverty, inequality and low labour absorption.

Ms Makhaya said South Africa should embark on structural reforms, eliminating spatial disparities and accelerating transformation so that when the investment grade was restored, it would be from a solid base.

Trudy Makhaya

“South Africa should embark on structural reforms, eliminating spatial disparities and accelerating transformation so that when the investment grade is restored, it will be from a solid base.”

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The last session of the conference assessed the NDP. Panellists were Business Leadership South Africa cEO Bonang Mohale, National Planning Commissioner Dr Thami Mazwai, South African Institute of Consulting Engineers Professional Development and Projects Managing Director Dr Allyson Lawless and Massmart Chairman Kuseni Dlamini.

THE NATIONAL DEVELOPMENT PLAN (ndP)

Dr Mazwai said the government took the NDP seriously, with all government departments required to do their annual planning in terms of the NDP. He

said expenditure of the departments was also expected to be aligned to the NDP.

He said the timelines of the NDP would not change. He said it was not advisable to change the NDP’s timelines beyond the current 2030.

“Once you start getting into that type of exercise, you are going to lose the plot,” he said. He said the National Planning Commission had decided against such a move.

“Let us deal with what we have and see what we can achieve. Let us push very hard. The NDP will succeed because ordinary South Africans will make sure that it succeeds. We have to hold one another to account. We must make sure that

Dr Thami Mazwai, Commissioner: NDP


certain things do not happen and that certain things happen. This economy is not going to grow if you think government has the responsibility to provide you with social grants,” Dr Mazwai said.

Mr Dlamini said South Africa’s focus should be on implementation. He said the country had enough policies.

“Let us have conversations around setting clear goals and targets,” he said.

Mr Mohale described the NDP as an “amazing, over-arching goal” of South Africa. He said it is tantamount to a world-class economic vision. “Like every other plan, it is work in progress,” he said.

However, hee lamented the time lost when the Plan was not implemented for three years after it was unveiled. He said government’s focus has not been on the implementation of the NDP.

“Unfortunately, we happen to be led by a President that, since 2007, has been pre-occupied with staying out of jail and not improving the quality of life of the majority of our people. What we have witnessed in the last eight years is not consistent with the Preamble to our Constitution,” Mr Mohale said.

He was highly critical of corruption in government and lambasted State capture. He said State capture was much more serious that corruption: “It is systematic. And that is where we have been spending most of our time,” he said.

It was not by accident that capable individuals were removed from State-owned enterprises and replaced by those meant to advance the State capture project, Mr Mohale said.

He said there was a shadow State “where the Cabinet is no longer the centre of power. You create inter-ministerial committees to by-pass where politicians are finally held accountable.” He said the Constitution was what stood between South Africans and anarchy.

Closing the conference, SEIFSA CEO Kaizer Nyatsumba said it was critically important for all stakeholders, in particular the Government, business and labour, to work together in the best interests of the country. He said that individual South Africans and business leaders were far more powerful than they believed themselves to be, and that they had a responsibility to speak out against misgovernment.

“it was critically important for all stakeholders, in particular the Government, business and labour, to work together in the best interests of the country.”

‘

Bonang Mohale

“Unfortunately, we happen to be led by a President that, since 2007, has been pre-occupied with staying out of jail and not improving the quality of life of the majority of our people. What we have witnessed in the last eight years is not consistent with the Preamble to our Constitution.”


The acquisition improves Konecranes’ position as a focused global leader in the industrial lifting and port solutions market. Konecranes stands to achieve

substantial growth opportunities in the service business, already a stronghold of the company in Southern Africa. Konecranes has a long history of conducting routine service inspections, repairs, and refurbishment of Demag cranes.

In South Africa, the merger also extends to the Wolff Cranes brand, acquired by Demag in the late 1980s. In terms of the port-material segment, this includes handling technology, with a broad range of manual and semi-automated solutions under the Gottwald and Noell brands.

Knut Stewen, Konecranes’ Managing Director, Southern African Countries, and Vice President, Head of Region, Africa, said: “We are extremely proud to combine forces with Demag. We want to provide a home for Demag and Port Solutions, from which these businesses can grow and become stronger as part of our joint organisation. The acquisition makes it possible for us to realise a long list of synergies between our two companies. We will be a single technology company, ready to create the next generation of lifting.”

This sentiment was echoed by John Haarhoff, Managing Director of Demag MHPS: “We strongly believe that, in the long term, sharing combined technology will allow the two businesses

TWO cRanE gianTs JOIN FORcES

INdUSTRy NEwS

Following the finalisation of Konecranes’ acquisition of Terex MHPS – which, in effect, is Demag Cranes, Hoists, Material Handling and Ports Solutions – the two global crane brands will share their considerable combined knowledge and technology, becoming a substantial force in the lifting business in sub-Saharan Africa.


to develop solutions that will further improve the productivity and safety of the Demag, Wolff and Konecranes brands. Together we will aim to excel at providing the services our customers require.”

In a first joint team effort, the Demag/Konecranes team signed a three-year service and maintenance contract for Arcellor Mittal’s Saldanha Steel Mill, which will require a supervisor and four technical teams on-site.

Miikka Kinnunen, Vice President, Investor Relations, explained: “Konecranes is well-prepared to deliver expected synergies, based on the extensive integration planning work carried out jointly with Demag over recent months. Of the total of €140 million per annum synergies targeted within three years, €35 million is expected to be implemented within 12 months from 1 January 2017, from which date the MHPS Acquisition is deemed effective from a financial point of view. Overall, synergies will come from procurement, operations, and SG&A. One-time implementation expenses are expected to amount to €130 million, with €60 million worth of anticipated capex. In addition, dynamic synergies related to new opportunities in global service operations are expected to lead to significant earnings growth.”

Kinnunen added further that the consideration for the Demag business was US$595 million and €200 million in cash, and 19.6 million new Class B shares. Pursuant to the Stock and Asset Purchase Agreement (SAPA) dated 16 May 2016, the final cash consideration is subject to post-closing adjustments for cash, debt, working capital, and the closing of the sale of the STAHL CraneSystems business. The final number of Class B shares may be subject to certain adjustments, in accordance with the SAPA. Based on 2015 financials, Konecranes and Demag had aggregated sales of about €3.5 billion, an adjusted EBITDA of €267 million, and a total workforce of about 19 000.

For more information, contact John MacDonald on (011) 864 2800, 076 403 3184, or email [email protected].

On 4 April 2016 – six Interns, Amelia Talane, Jeanette Dlamini, Tshepo Mjinji, Mzwandile Xaba, Ishmael Mabeta and Tshimangadzo Netshituni – from Ekhuruleni East Technical

Vocational and Education Training College started their Workplace Integrated Learning at SEIFSA.

The interns added enormous value to SEIFSA, bringing new ideas and skills to the workplace. This very successful internship programme concluded on 30 September 2017, with the issuance of certificates and a congratulatory message from the CEO during the SEIFSA Staff Communications Session on Wednesday, 27 September 2017.

SEIFSA INTERNS

INdUSTRy NEwS

Mzwandile Xaba presented with a certificate by Kaizer Nyatsumba: CEO

Kaizer Nyatsumba: CEO, presenting Tshepo Mjinji with a certificate

Kaizer Nyatsumba: CEO, with Ishmael Mabeta

Kaizer Nyatsumba: CEO, Presenting Jeanette Dlamini with the certificate



EcONOMIc ANd cOMMERcIAL

South Africa’s real gross domestic product (GDP) grew by 2.5% in the second quarter of 2017, following a contraction of 0.6% from the previous quarter, ending

the second recession in almost a decade. Considering all the negative economic headlines of the past few months, this is certainly a welcome development. A closer look at the details of the GDP data shows that amongst other sectors, this uptick was largely underpinned by the positive contribution made by the agriculture, forestry and fishing industry. The sector grew by 33.6% quarter-on-quarter (q/q) in the second quarter, following a 22.2% q/q in the first quarter of the year.

While the figures confirm that the agricultural sector is finally out of the woods after widespread drought damage, the same cannot be said of sectors such as manufacturing and in particular, the metals and engineering (M&E) sub-sectors. The contribution of the manufacturing industry (including the M&E sub-components) was modest. The industry grew by 1.5% q/q in the second quarter of the year after it had contracted for three consecutive quarters. In the M&E sub-components, the best performers in the second quarter of 2017 were the motor vehicles, parts and accessories and other transport equipment division; while the rubber and plastic products sub-components

were the worst performers in the first quarter of 2017.

However, although the second quarter GDP figure is widely welcomed, this is no cause for celebration but rather cautious optimism in the real economy, given that most economic fundamentals still point towards an economy that is still slowly recovering from a low base. As both the agriculture and manufacturing sectors start to see signs of green shoots (literally and figuratively so for the agriculture sector) and output expansion, it is not the time to rest on our laurels. There are some concerns on the horizon that could slow growth of these sectors in the near term.

From an agricultural perspective, the decline in agribusinesses confidence, slow white maize exports and persistent dryness in the Western Cape Province could slow the performance of the sector in the short-to-medium term.

After declining by one index point in the second quarter of this year, the Agbiz/IDC Agribusiness Confidence Index declined further by two index points in the third quarter to 54 points. A reading above 50 indicates expansion in South Africa’s agribusiness activity, which means conditions were still fairly

By Dr Michael Ade, SEIFSA Chief Economist, and Agricultural Business Chamber Chief Economist Wandile Sihlobo

glOOMY daYs aWaiT sa dESPITE gREEN SHOOTS


favourable in the third quarter of the year but on a declining trend.

In addition, the water levels in the Western Cape dams averaged 35% in the week ending 11 September 2017, which is 27% lower than the corresponding period last year. This is a cause for concern, not only because it is weighing on agribusinesses confidence, but the province’s contribution to the agricultural economy. Data from Stats SA shows that the Western Cape contributes roughly 22% to total agricultural GDP.

Similarly, business (including CEO’s) confidence is severely lacking in the manufacturing sector. According to data released by the Stellenbosch University’s Bureau for Economic Research this week, business confidence in the manufacturing sector remained weak at just 27% in the third quarter – indicating that just over 70% of surveyed businesses in the sector were unsatisfied with business conditions. From an M&E perspective, a combination of factors such as adverse developments in commodity markets, weaker domestic demand from unfavourable commodity prices (although commodity prices have rebounded from tapering-off in 2015), increasing input costs, lack of gross fixed capital formation and dumping (a huge concern for the steel industry) have all weighed on the sector. In addition to this, local firms also face an increasingly constrained domestic consumer who has been hampered by low income growth, tight credit markets and a higher tax burden.

However, last week (21 September 2017) the South African Reserve Bank (SARB) decided to leave the repo rate unchanged at 6.75% in an attempt to further boost economic growth and stimulate demand. The announcement also augurs well for local firms who face an ever more constrained consumer demand impacting negatively on their margins. We hope that the decision will aid in boosting the overall business confidence and production.

It is thus important that while we celebrate South Africa’s exit from the recession, we continue to consider how this growth can be made sustainable and more inclusive. One way of addressing this would be to improve productivity, expand export markets particularly in the rest of the continent, improve on both productive efficiency and capacity utilisation (which is below a sectoral benchmark of 85% for the M&E sub-sectors) and increase capital inflows. This is of course easier said than done and will require commitment from both policy makers and businesses.

While it is clear that a consistent surge in agriculture and manufacturing sectors (albeit rather slowly) contributions to GDP has helped lift South Africa out of an economic slump, the growth may be relatively weak in the coming quarters. This is especially given that in addition to the concerns succinctly summarised above, are domestic political uncertainty, which will continue to weigh on investments and output in the near-to-medium term.

Theory and Calculation of Contract Price Adjustment (CPA)

The Theory and Calculation of Contract Price Adjustment Workshop provides a systematic explanation of the full range of indices used in Contract Price Adjustment, practical application of indices and formulas and how to derive the most value from the practice.

EARN CPD POINTS

attend our CPA Courses

Venues

www.seifsa.co.za

SEIFSA Offices, Johannesburg11 October 2017

Hotel 64 on Gordon,Durban19 October 2017

Birchwood Hotel,Boksburg25 October 2017

Ruimsig Country Club,Ruimsig8 November 2017

Radisson Park Inn Newlands, Cape Town16 November 2017

For more information please contact:Marique Kruger

Economist on 011 298 9408 or

[email protected]



HUMAN cAPITAL ANd SkILLS dEVELOPMENT

The event brought together Macsteel employees, fulfilment partners and students from all around Gauteng. Students were able to recognise the

potential of Macsteel’s bursary programme, as well as understand the various careers that exist, the need for these vocations and how to pursue them.

The focus was to enable students to apply their minds around subject choices, bursaries and study opportunities. The programme included “a Graduate’s Perspective”, where previous graduates participated in a panel discussion on how they made their subject choices, challenges they had to overcome, the transition from school to university, influences and motivators, and other relevant topics, allowing the students to engage and ask questions.

Vocational Sessions, facilitated by a Subject Matter Expert in the various fields, allowed students a peep into what “a day in their shoes” typically entails. Vocations such as Information Technology, Engineering, Human Resources, Operations, Accounting, Marketing and Health and Safety are amongst those that were discussed in break-away groups, where the learners had a choice to attend the sessions of interest to them.

On Day Two of the Career Readiness Programme, students had the opportunity to take part in developmental programmes that taught the learners about being go-getters and leaders who make things possible.

Throughout the programme, it was evident that there had been a paradigm shift in the mind-sets of the students. When

caREER REadinEss PROgRaMMEMacsteel hosted a career Readiness Programme for students from grade 8 – 12 on 20 & 21 July 2017. The programme focused on “the preparation of young minds, to equip them with the tools necessary to go forth into adulthood with a clear understanding and the capacity to become viable contributing members of society”.


speaker Melanie Mulholland from SEIFSA asked the students who wanted to attend university after school, everyone put up their hand, unaware of the other educational options (e.g. TVET colleges) out there. After getting information and clarity about their options however, the students were especially intrigued about the “earn while you learn” programmes such as Apprenticeships. This we saw in the number of learners that enquired about these programmes during the Engineering Vocation sessions.

The practical focus of the event was to ensure that all participants left with a better understanding of the employment environment and received guidance on career choices. The feedback from the students confirmed that after attending the Career Readiness Programme, they were more confident and self-assured about their career-choice. As Macsteel we look forward to continuing this programme in years to come, grateful that we can make an impact and contribute towards these students’ future success.


SMALL BUSINESS HUB

cOLLABORATINg TO BrINg LArgE AND SMALL BuSINESSES TOgETHEr

WE CAN MANAGE YOUR ORGANISATION’S ENTERPRISE AND SUPPLIER DEVELOPMENT PROGRAMME

PROVEN TRACK RECORDIN ADDING VALUEWe have a proven track record as our previous work has been successfully audited and verified by a SANAS-approved verification agency.

1

1

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POWERED BY SEIFSA

SEIFSA SBH does not deduct

any administration or project

management fees.

Managing an SED initiative can be strenuous on an organization’s human resources; hence our aim as the SEIFSA SBH is to alleviate such strain. We have diverse and adequate expertise and, therefore, are able to manage the overall supplier and enterprise development process while providing support to the beneficiaries.

The SEIFSA Small Business Hub (SBH) is a department of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), created specifically to address the needs of small and micro-enterprises (SMEs) in Southern Africa to contribute to the growth of the economy and the creation of jobs.

• Endorsed from a multi-national company for which we have successfully implemented a Supplier Enterprise Development Programme. • Our focus goes beyond enhancing the B-BBEE score card for our clients. • We produce growth-inducing tangible results among your suppliers and selected enterprises. • If significant gaps identified within the SMMEs fall outside the scope of your investment, we perform due diligence to link them to other relevant funded programmes

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In order to obtain the maximum score of twenty (20) on SED,

a measured entity must make Supplier and

Enterprise DevelopmentContributions of 3% of Net

Profit After Tax (NPAT).

SEIFSA, in partnership with Smart Procurement World/Absa Enterprise & Supplier Development Expo, brought the collaborative launch of Empowered Engineering and Manufacturing Initiative (EEMI)

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA), in collaboration with Smart Procurement World (SPW) and Absa Enterprise and

Supplier Development Expo’s brought together the launch of Empowered Engineering and Manufacturing Initiative (EEMI) at the SPW Indaba and Absa ESD Expo on 19 - 20 September 2017 at Gallagher Convention Centre, Midrand.

SEIFSA CEO, Mr. Kaizer Nyatsumba, delivered the EEMI opening address on 20 September, 2017, in which he emphasised the importance of nurturing ESD partnerships between established businesses and empowered small to medium enterprises.

The primary objective of the EEMI conference was to provide a platform for industry players to share opportunities and challenges for small to medium, empowered organisations. This will be achieved through driving ESD partnerships (funding, training, mentoring, and support) and, subsequently effecting economic transformation and supplier development in the industrial, engineering and manufacturing sectors.

The event attracted more than two-hundred-and –sixty (260) black-owned SMME exhibitors and over one thousand five hundred (1,500) procurement professionals and visitors from both the private and public sectors.

SEIFSA’s Small Business Hub beneficiary exhibitor was Designer Cables, an IPC- and ISO 9001:2015 certified manufacturer of harnesses and cables. Designer Cables was

sponsored to exhibit through the SEIFSA Small Business Hub ESD Program funded by a multinational company operating within the power transmission industry. The event provided Designer Cables with marketing and networking opportunities which we trust will realise great returns.

The SEIFSA Small Business Hub manages Supplier and Enterprise Development Projects. For more information please email [email protected].

designer cables exhibiting at the EEMi from (left) bathabile ngobese and (right) Meshack seapela, cEO


WE CAN MANAGE YOUR ORGANISATION’S ENTERPRISE AND SUPPLIER DEVELOPMENT PROGRAMME

PROVEN TRACK RECORDIN ADDING VALUEWe have a proven track record as our previous work has been successfully audited and verified by a SANAS-approved verification agency.

1

1

1

POWERED BY SEIFSA

SEIFSA SBH does not deduct

any administration or project

management fees.

Managing an SED initiative can be strenuous on an organization’s human resources; hence our aim as the SEIFSA SBH is to alleviate such strain. We have diverse and adequate expertise and, therefore, are able to manage the overall supplier and enterprise development process while providing support to the beneficiaries.

The SEIFSA Small Business Hub (SBH) is a department of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), created specifically to address the needs of small and micro-enterprises (SMEs) in Southern Africa to contribute to the growth of the economy and the creation of jobs.

• Endorsed from a multi-national company for which we have successfully implemented a Supplier Enterprise Development Programme. • Our focus goes beyond enhancing the B-BBEE score card for our clients. • We produce growth-inducing tangible results among your suppliers and selected enterprises. • If significant gaps identified within the SMMEs fall outside the scope of your investment, we perform due diligence to link them to other relevant funded programmes

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In order to obtain the maximum score of twenty (20) on SED,

a measured entity must make Supplier and

Enterprise DevelopmentContributions of 3% of Net

Profit After Tax (NPAT).


HIV TRANSMISSION: A SIMPLE dEFINITION

To put it as simply as possible: HIV can only be transmitted or passed on from one person to another when one person’s body fluids (for example, blood or semen) get into another person’s bloodstream.

This doesn’t happen when you hug or talk to someone, or when you use the same fork, cup, plate, towel or bathroom as another person. So, there is no risk of passing on HIV in these situations.

wHIcH BOdy FLUIdS IS HIV TRANSMITTEd THROUgH?

HIV is transmitted through the following types of body fluids:• Blood• Sexual fluids, i.e. semen and vaginal fluids• Breast milk

What about other bodily fluids?While HIV can be detected in other fluids, including saliva, sweat and tears, these fluids don’t pose a risk of transmission as the amount of HIV in these fluids is low. It’s important to remember that the amount of HIV in body fluids is affected by factors such as antiretroviral treatment and what stage of HIV infection the person is at.

HOw IS HIV TRANSMITTEd?HIV can only be transmitted in the following ways:• Sexual intercourse (vaginal, anal or oral)• Mother to her child transmission – during pregnancy or birth,

or through breastfeeding

• Contact with infected blood or sexual fluids – but only in situations where infected body fluid is able to enter another person’s bloodstream

In terms of contact with infected blood – this includes cases like receiving a blood transfusion from an infected person or sharing a needle as an injecting drug user with an infected person. It can also happen through accidental exposure by way of needlestick injury (e.g. a doctor working with an infected patient) or through a workplace accident where blood is shed. However, it’s important to note that HIV cannot pass through normal, unbroken skin.

wHAT OTHER FAcTORS AFFEcT TRANSMISSION?

Viral load – Successful antiretroviral treatment can cause the amount of HIV in the blood to be so low that viral load tests can’t detect it. The lower a person’s viral load, the more difficult it is for HIV to be transmitted. However, this does not mean that the person is now HIV negative; HIV will still be present in the body.

Studies in heterosexual couples (where one of the partners has HIV) have demonstrated that HIV-positive people who are on antiretroviral (ARV) treatment are about 20 times less likely to transmit the virus to their partners than people who are not taking treatment.

In short, HIV can only be transmitted when one of these infectious body fluids has enough HIV in it and this fluid gets into someone else’s bloodstream.

MANAGING HIV AIDS IN yOUR wORkPLAcE

ALLIANcE PARTNER

While it’s important to discuss strategies to prevent and manage HIV infection in the workplace, it’s just as important to understand the basics too. This article takes a step back and focuses on the fundamentals of HIV transmission.

Contact Redpeg for accredited HIV/AIDS workplace training, consulting and research.

[email protected] | (011) 794 5173 | www.redpeg.co.za


The SEIFSA Training Centre is a state-of-the-art training centre that has both the resources of industry experts and equipment to offer specialised artisan training.

Take Note:Next Intake inJanuary 2018

SEIFSATRAINING CENTREi n s p i r i n g e x c e l l e n c e

Established by Managed by

SEIFSA Training Centre

Lets get socialLike us. Follow us. Keep in touch.

To keep in touch with SEIFSA

SEIFSA SEIFSA_SA Steel and Engineering Industries Federation of Southern Africa

SEIFSA Training CentreTel: 011 422-2500 Fax: 011 422-2503Email: [email protected] 16 Lancaster Road, Industrial Sites, Benoni

SEIFSA Training Centre


INdUSTRIAL RELATIONS ANd LEgAL SERVIcES

Section 30(1) of the LRA states, “the constitution of a Bargaining Council must at least provide for:”

- (k) the procedure for exemption from collective agreements.”

One of the MEIBC’s policies is the Exemption Policy, which allows companies which are unable to afford the LEP to submit an application to its local regional council for exemption from

sEEking ExEMPTiOn FROM PaYing THE lEaVE EnHancEMEnT PaY (lEaVE bOnus) in dEcEMbER – WHERE yOU COULD EFFECTIVELy REDUCE yOUR DECEMBER WAGE BILL By 50%

SEIFSA is acutely aware that the current economic environment may pose severe constraints on certain member companies, particularly insofar as the payment of Leave Enhancement Pay (LEP) is concerned.

paying the LEP to its employees, this application much reach the Council by 31 October of any year.

Companies do not only have the choice of applying for a full exemption to the LEP, but may choose to apply for total exemption, partial payment and / or a deferred or staggered payment. However, please note, employers who are successful, will be expected to become compulsory contributors to the monthly scheme, where a monthly amount equal to the value of the LEP accumulated by employees in that month must be


_continues on page 40

paid over to the MEIBC. At the end of the year this amount is then paid back to the company who then uses it to pay the employees their LEP for that year. This is on the understanding that if companies cannot remain on the monthly compulsory contribution scheme, due to financial difficulties, they can apply for a further exemption to be exempt from the scheme and paying out LEP in that succeeding year.

Management’s attention is drawn to the importance of the council’s requirement that an application must be accompanied by the following important information in order for the application to be considered:

A fully detailed motivation explaining the difficulties that the company is experiencing and hence the need for the application.

Audited Financial Statements for the financial year ending 2014/2015. In the case of a closed corporation - a full set of financial statements which are to be signed by an Accounting Officer and the latest management accounts for the last three months. If the financial statements are older than six months, then the management accounts for the recent three months are required.

Formal confirmation that employees were informed of the company’s decision to make an application for exemption.

Where employees reject the company’s approach, they are to be informed of their right to submit written reasons for objecting to the exemption application and such reasons should be attached as an annexure to the company’s application.

The signature of at least two employees who accept being the representatives for the workforce and who will be affected by the application. Representatives of the workforce are to sign the form, contained in the exemption application questionnaire, consenting to this.

The signatures of employees accepting that they have been informed of the implications of what the firm is proposing to the Council.

Where the employees are trade union members, the company should inform the local trade union office of the intention to apply for an exemption and request, in writing, a

meeting with the local official to discuss the impact of the exemption on the company and the members of the union.

Where employees have elected a trade union representative or representatives (shop stewards) these persons should be requested to sign that they were consulted and that they understand the need for applying for the exemption. Where the local trade union official and/or shop stewards have been consulted and where they reject the application, such refusal must be recorded in the application and countersigned by at least two witnesses.

Where the local trade union official and/or shop stewards and affected employees support the exemption application, this signed agreement should be included with the application.

It is recommended that all meetings in this regard between management, employees, shop stewards and union officials have signed attendance registers, and that the minutes of such meetings be submitted with the exemption application.

The application itself is to be signed by either a director of the firm, member, owner or a senior accountant - neither a bookkeeper nor the human resources manager’s signatures will be acceptable.

Please note: It may at times be very difficult to get employees to sign various documentation including an document seeking exemption from the LEP or wages. If this is the case it may be useful and easier to get employees to sign an attendance register and in addition to indicate whether they support or do not support the exemption application.

IS IT TOO LATE TO OBTAIN AN EXEMPTION FROM THE 2017

wAgE INcREASES?

The Main Agreement does require that an application for an exemption to the wage increases must be made within 30 days of a wage agreement being reached in a year in which there are wage negotiations and by 31 July in a year there are no wage negotiations and companies are implementing a multi-year agreement.

If a company has already implemented the wage increases they would be unable to thereafter apply for a wage exemption, however if they still have not given the wage increases then it is still possible to apply for exemption. If this is the case then the company must apply for a late condonation, where they ask the MEIBC to condone their lateness and give justifiable reasons for

The signatures of employees accepting that they have been informed of the implications of what the firm is proposing to the Council.

‘


the lateness. The late condonation letter would need to have a Commissioner of Oaths stamp.

If a company is successful in its exemption application, would they need to catch up on the lost increase payment next year in addition to giving the next year’s wage increase?

The answer is no, however if employee’s wages do drop below the minimum rate of pay in the following year, companies would be expected to not only give the next year’s wage increase but also ensure that employee’s wages are at least on the minimum.

What happens if the company finds itself in a situation where it cannot afford to do either or both? Then the company would need to apply for an exemption again, as most exemptions only last for a year, only in exceptional cases would exemptions last longer than a year and the company’s business plan would need to support that and preferably the employees.

wHAT ARE THE cRITERIA FOR OBTAININg AN EXEMPTION?

The exemption application goes to an independent auditor who is appointed by the MEIBC. The company’s financial information is only seen by the independent auditor and no one else, so this remains confidential. The auditor after examining your financial documentation will make a recommendation to the MEIBC based upon whether the company can afford the increases or the LEP or not, so the chief criteria is affordability. The MEIBC is generally guided by the auditors recommendation and will make a decision based upon the recommendation.

However, it may happen that a union may challenge the recommendation and bring other evidence that persuades the MEIBC not to support the exemption. In such a situation what can you do if your exemption application is rejected?

The LRA requires that all Councils where Collective Bargaining takes place must have a process to allow for wage exemptions and where exemptions are rejected by the Council, the exemption process and policy must include an appeal process, so if a company’s exemption application is rejected then the company may appeal against the rejection. The appeal is then considered by an independent auditor who makes a decision based upon the company’s financial situation and whether they can afford the exemption of not.

• Do you have to have an agreement with your employees to be successful in obtaining an exemption?

• No you do not.• What happens if your employees reject the exemption? Does this mean that your exemption will fail?

No it does not. The Council is strongly influenced by the auditors recommendation on whether the company can afford the LEP or wage increase, whether the employees support the exemption or not.

However if you do reach an agreement with your employees, this will take precedence over the auditors recommendation. So if the employees support the exemption application

even though the auditor does not, the Council will make a ruling in line with the plant level agreement.

SMALL BUSINESS EXEMPTION POLIcy AS AN AddITIONAL cRITERIA FOR EXEMPTION

Exemptions in this category will be granted for a period not exceeding 36 months. The exemption shall be in respect of the entire Main Agreement or in respect of specified clauses of the Main Agreement but shall not apply to any other collective agreement of the Council.

The Council will consider applications on merit taking into account one or more of the following factors:

• That the business is not a subsidiary of another company;• It employs no more than ten *scheduled employees;• *(A scheduled employee is an employee engaged in

production related activities and whose job is contained in Part II of the Main Agreement)

• It has been operating for a period of less than three years;• It is able to show that such an exemption will enable it to

retain existing jobs or create additional jobs in the firm. This particular factor must be covered in the motivation;

• The financial situation of the business;


It is important to note that the Bargaining Council is obliged to consider all applications for exemption irrespective of the basis on which they are founded.

‘


STRUggLINg BUSINESS EXEMPTIONS

Application for exemption or deferment of implementation from specified provisions of the Main Agreement will be dealt with after giving consideration to the following:

• Clear evidence of financial difficulties including:• An explanation of the difficulties being faced by the

company.

It is important to note that the Bargaining Council is obliged to consider all applications for exemption irrespective of the basis on which they are founded. This effectively means that financial reasons are not the only criteria which must be considered. Employers may apply for an exemption on any one or more of the following reasons (but not limited to):

• Increased competitive threats;• Inability of employer to pass on cost increases to final

customers;• Technological changes threatening business survival;• Inherently high difference between wage rates actually

paid and current affordability of market competitive considerations facing an employer;

• Market decline, projections, etc.;• Loss or potential loss of business;• Existing/ current unprofitable contracts the consequences

of which are only likely to manifest themselves in future/ current (unreported) accounting periods;

• Expansion opportunities (including capital investments) where cheaper labour costs could influence investment decisions; and/ or

• New ventures/ operations which justify retention or creation of job opportunities at reduced wage costs.

One nevertheless anticipates that application for exemption will primarily be founded on the grounds of affordability, job retention and/or job creation.

SEIFSA ASSISTANcE TO MEMBER cOMPANIES:

Any member wishing to apply for exemption is encouraged to contact the SEIFSA Industrial Relations and Legal Division for advice and assistance. In addition please note that one can download the SEIFSA Management Brief and Pro-Forma Questionnaire on Applying for Exemption from the LEP on the Seifsa Main Agreement on-line portal at www.seifsa.co.za. Those companies that have purchased a Main Agreement handbook are also entitled to a pin code to access the portal.

SEIFSA officials are available to give advice over the phone or via email on these matters and available to come out to companies and consult with management and represent management on all IR and Legal matters, including applying for wage and LEP exemptions, implementing short-time, lay-offs and retrenchments and to assist with the chairing of disciplinary hearings and representation at conciliation, arbitration and the Labour Court.

Please do not hesitate to contact the SEIFSA IR and Legal personnel who are experts in the fields.

Michael LavenderIndustrial Relations Manager

One nevertheless anticipates that application for exemption will primarily be founded on the grounds of affordability, job retention and/or job creation.

‘



Negotiations traditionally take place on an annual basis between representatives of the Lift Engineering Association (LEA), a registered employer

organization federated to SEIFSA and the South African Equity Workers Association (SAEWA), the majority representative trade union in the sector. The LEA is represented by SEIFSA’s Industrial Relations Division in the annual negotiations with the SAEWA.

WagE nEgOTiaTiOns sETTlEd in THE liFT EnginEERing indusTRY 6.5% WagE incREasE FOR THE PERiOd 2017 / 2018: nEgOTiaTEd bY sEiFsa’s indusTRial RElaTiOns diVisiOn

The Lift Engineering Industry Collective Agreement is a sectoral agreement applicable to the lift engineering industry, comprising the installation, repair and maintenance of lifts, escalators and elevators. The sector resides under the scope and jurisdiction of the Metal and Engineering Industry Bargaining council.

THE 2017 NEgOTIATIONS:

An agreement has been reached in the lift and escalator industry for the period 1 July 2017 to 30 June 2018, following negotiations over the months of May, June, July, with limited industrial action in August.


The South African Equity Workers’ Association (SAEWA’s) key demands were:

A wage demand of 15% to address the cost of living increases

• An one year duration agreement• An Agency Shop Fee. SAEWA stated that the union

represents 60% of the workers in the industry and that all employees who are covered by the Collective Agreement and who are not members of SAEWA must pay an Agency Shop Fee as provided for in Section 25 of the Labour Relations Act.

• The various allowances to all increase by 15%, the allowances listed are,o the standby allowance,o the travelling allowance,o the subsistence allowance,o the out of pocket allowance,o the dirt allowance,o the certificate allowance,o the underground allowance, ando the tool allowance,

Employers in the sector responded, indicating that the following factors needed to be taken into account:• These are difficult economic and trading times and a highly-

competitive market.• Operational costs are continually increasing above

consumer price index (CPI), which has been sitting just

slightly over 5% for most of the months that the parties were negotiating. This leads to diminishing margins and returns, which has been exacerbated by the weak rand, making the imported products more expensive.

• Business has slowed down, and there are very few new contracts if any. Likewise the companies are not able to sign up more maintenance contracts. In addition and importantly, the fee escalation to clients of maintenance contracts is generally based on CPI and sometimes even below CPI.

• It must be taking into account that employees in this sector are on good remuneration packages with very favourable benefits. The negotiations on the Lift Engineering Collective

Agreement which addressed wage increases and amendments to terms and conditions of employment, took place on 23 May 2017 and 30 May 2017. It was recognized that the key issues where agreement was necessary were the increases to wages and allowances. This enabled the parties to quickly focus on these two key areas, and thereby avoid other matters that may distract from these key areas that required agreement be reached to be able to settle the negotiations. The General Secretary of the MEIBC acted as a mediator on these days and attempted to get the parties to reach an agreement and thereby avoid deadlock, dispute declaration and potential industrial action. Even with his best endeavours there remained a significant gap between where the employers and the union were prepared to settle, and the parties were unable to conclude the negotiations and settle.

This then led to SAEWA lodging a dispute with the MEIBC

against the LEA on 31 May 2017. The dispute resolution meeting was set down for 22 June 2017.

YOUR REFERENCE NUMBER FOR THIS CASE Please quote this reference number when communicating. It will assist us in providing

information more quickly and efficiently. MEGA50936

THIS IS AN URGENT NOTICE FOR LEGAL PROCEEDINGS TO ALL PARTIES MENTIONED BELOW.

To: SAEWA obo Members 6 Cachet Street Lambton Contact: Reane Mels

Tel: 011 827-5353 Fax: 086 686-9103 Email: [email protected]

To: Lift Engineering Association of SA 42 Anderson Street 6th Floor,Metal Industry House Contact: Micheal Levender

Tel: 011 298-9415 Fax: 011 298-9515 Email: [email protected]

31-May-2017

Dear Sir/Madam, Case Reference MEGA50936 Matter between SAEWA obo Members and Lift Engineering Association of SA Dispute 64(1), 134 - Other mutual interest issues You are required to attend: Date 22 June 2017 Time 12:30PM Venue Hearing Room 09 1st Floor, Metal Industries House 42 Anderson Street Johannesburg 2001 Process Conciliation Panellist/s David Levy If you require assistance or have queries regarding this process, please contact the CDR. We are able to assist with process queries, but are not permitted to advise on the substance of the case. In this particular regard, please contact a knowledgeable person or organisation. Yours faithfully, Patricia Ntombikayise Zwane Metal & Engineering Industries Bargaining Council 011 834-4660


THE dISPUTE MEETINg OF 22 JUNE 2017

The Lift Negotiations dispute meeting was held on 22 June 2017, under the auspicious of the MEIBC at the CDR. After many hours of negotiations, conciliated and mediated by the CDR, the employer parties put forward a final position to SAEWA to attempt to reach an agreement and resolve the wage dispute and deadlock.

The employers final position was: - a wage increase of 6.5%- all allowances to increase by 6.5% SAEWA, advised the employer that they will let the

employers and the MEIBC know by 3 July whether there is an agreement or not.

SAEWA then responded on 4 July, saying that the members

have indicated that they are only prepared to settle at 7.5%, advising that the parties are in deadlock, and if the parties could not settle then the parties would need to agree on picketing rules for any upcoming industrial action.

After much deliberation and consideration of SAEWA’s settled demand, the vast majority of the responses from the companies that make up the LEA, was that in order to ensure the long term viability and success of the industry they would be unable to increase their final position which was offered previously, namely a 6.5% increase to wages and allowances. This was formally communicated to SAEWA on 7 July.

Following the LEA response on 7 July there were a number of attempts by SAEWA, via email and phone to propose that the parties settle at 7%. The response from the LEA was the same as previously communicated, again the vast majority of the responses from the companies that make up the LEA, was that the position of the LEA remained unchanged at 6.5%. This was formally communicated to SAEWA on 17 July.

The LEA was advised that the majority of the SAEWA

members rejected the 6.5% offer and would embark on strike action. The LEA was served with Strike Notice on 4 August.

The Manager Lift Engineering Association SEIFSA 04th July 2017 E-mail:[email protected]: Mr. Mike Lavender Re:WageNegotiations(MEGA50936)DearSir,FirstlyIwouldliketotakethisopportunitythanktheLiftEmployersAssociationforgivingusastheunionsaspacetoconsultextensivelywiththemembershipnationwide.Therearestillsomeregionsthatneedtosubmittheirreports.Howeverwehavereceivedeightypercent(80%)ofreportsnationallyandunfortunatelythemajorityofthemembershiprejectedthesixpointfivepercent(6.5%)offeredbytheemployers.Thecompromisedpositionfromourmembershipwillbesevenpointfivepercent(7.5%).Astheleadershipoftheindustryweneedtoconsiderthepleafromtheworkforce,andtodecidewhethertodisrupttheindustrywithonepercent(1%)thatmakesadifference.AsLabourwehumblyrequesttheEmployerstore-considertheirstanceofsixpointfivepercent(6.5%)versussevenpointfive(7.5%)NB:Ifweareindeadlockweneedtoagreeonpicketingrules.Iamopentoanysuggestionfromyouinpavingthewayforward.Wewillappreciateiftheemployerscanre-considerthesevenpointfive(7.5%)asasettlement.KindlyrevertbacktousbeforecloseofbusinessonFridaythe07thJuly.Kindregards,SiphoMayiselaMetalCoordinator



THE STRIkE NOTIcE ANd STRIkE AcTION

Soon thereafter the LEA and MEIBC were receiving emails from SAEWA that some companies of the LEA were involved in locking out their members illegally. In additions there were allegations from companies that striking workers were intimidating non-striking employees. Seifsa’s IR Division had to then intervene and provide guidelines and direction on these matters.

During the strike which took place from Sunday 6 August until Sunday 13 August, there were further attempts to persuade the employers to move off the 6.5% and for the MEIBC to facilitate further meetings. The LEA responded by advising that they are prepared to meet and discuss matters to attempt to find resolution but the LEA is not prepared to open negotiations and enter any discussions aimed at improving the 6.5% offer.

SETTLEMENT REAcHEd

On Monday 14 August the LEA was advised that SAEWA would accept the 6.5% increase. A long period of negotiations which started in May, was finally settled and signed on 14 August, with a week of industrial action.

TheSecretaryLiftEngineeringAssociation

4August2017(14:30pm)

CareofMichaelLavenderByemail: [email protected]

StrikeNoticeDearSir;Please be informed that the collective SAEWA membership rejects the 6, 5% wage increase offerpresentedtousbytheLEA.Wethereforeinformyouofourintentiontoembarkonprotectedstrikeaction, intermsofsection64(1)(a)(ii)oftheLRA,within48hourshereof.YoursfaithfullyRobertMcAlpineGeneralSecretaryCC: MEIBC–GeneralSecretary SiphoMayisela–Coordinator

ShopStewards


The Lift Engineering Industry Collective Agreement will remain in force and effect until 30 June 2017 and this ensures another year of peace and stability for the industry, with limited industrial action taking place. This is a credit to all those that took part in the negotiations.

The MEIBC is assisting the parties in making formal application to have the terms of the agreement gazetted and extended to all non-party employers and employees in the sector.

Michael LavenderIndustrial Relations Manager



&

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It includes:- Latest amendments, including wage increases for 1 July 2017- Pro forma letters ranging from limited duration contracts of employment to notifications for short-time, lay-off and retrenchments - Technical Schedules which provides essential information required to grade all jobs in terms of the main agreement’s five and 13-grade structures- An easy to read summary with explanations, plus the gazette version of the Main Agreement

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Main Agreement Online subscriptionSpecial features of the online portal

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IN ADDITION, MAIN AGREEMENT WALL CHARTSEIFSA Main Agreement Wall Chart - R284.89.00 (Ex VAT)Display the Main Agreement Wall Chart at your companies, tjis provides a easy to read summary of the key provisions of the Main Agreement, providing easy access to your staff in an endeavour to prevent disputes and provide clarity on the Main Agreement conditions of employment, which are in many areas different to the BCEA and which has to be display by lay

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