Steel industry: NEASA's Wage Model for the Steel Industry

Steel industry: NEASA's Wage Model for the Steel Industry

by Gerhard Papenfus

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Dear Steel Industry employer

NEASA will never condone the exploitation of employees. We, however, believe in the right of employers to pay wages based on what an employer can afford and is justified within the context of every business’ unique circumstances. This is the only way to preserve and to create jobs, and is a pre-condition for sustainable business.

Any alternative approach, where business is forced into a particular model, causes job losses and impacts negatively on economic growth. Also, any low-paying job is better than no job - especially within the context of South Africa’s 40 percent unemployment rate.

The NEASA approach towards wages has saved the Steel Industry tens of thousands of jobs and kept many businesses in operation.

This is why NEASA cannot support the Seifsa/Numsa unaffordable, unworkable and unethical wage dispensation, which we freed the Steel Industry from in 2011:


The current Seifsa minimum base wage rate of R50 per hour is approximately 40% more expensive than that of the second most expensive industry rate and is approximately 130% higher than the national minimum wage. That makes the Seifsa/Numsa wage of an unskilled employee completely unaffordable in a sector that is already fighting for survival.


Their ‘one-size-fits-all’ approach is not and never has been appropriate. It cannot be justified that businesses situated in rural areas, far from economic hubs, or  access to various transport options or input material, or an SMME with a handful of employees, for the sake of the so called ‘levelling of the playing field’, should pay the same rates as large employers, within our economic hubs that also enjoy the advantages of economies of scale. These businesses have very different economic realities and can not compete with large businesses with entirely different drivers.   


Furthermore, it is unethical for Seifsa to negotiate an unaffordable deal, with every intention of extending that arrangement to other employers, while their members are negotiating with an exemption application in their back pockets. This practice does not constitute ethical and bona fide negotiations.

The NEASA approach towards wages, is so far removed from that of Seifsa, that we no longer find ourselves in the same negotiating processes.


It is between these two wage models that business has to choose. The Seifsa-model is downright unaffordable, even for those who are party to that agreement. Contrary to theirs, the NEASA model allows you the freedom to conduct your business in the way you, the employer, think best.

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



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