MEIBC: Employers, retain your skilled employees

As previously communicated, Seifsa concluded a 3-year wage agreement with NUMSA and other trade unions.

It is expected that this agreement, at some point in time, may be extended by the Minister of Employment and Labour to all employers falling within the scope of the Metals and Engineering Industries Bargaining Council (MEIBC).

The consequence of such extension is that all employers will be obligated to apply the increases and pay the prescribed minimum wage rate.

NEASA has always held the position that the entry-level rates for employees in this sector, in particular at the lower levels, are excessively high and out of kilter with prevailing free market wage rates.

However, the free market operates on the principles of supply and demand and is naturally influenced by the availability of skilled employees in certain positions. It is therefore entirely possible that some skilled employees may demand a higher wage than the prescribed minimum wage rate for that particular grade of employee due to the scarcity of the employee’s skill, or due to the value such an employee adds to the business.

The question then arises as to whether an employer is entitled or obligated to entertain a request by an employee for a higher wage within the context of the collective bargaining framework.

The main agreement of the MEIBC itself precludes any trade union or employee from demanding any enhancement in conditions of employment from an employer, if such condition of employment is regulated by the main agreement. Therefore, once the agreement has been extended, no trade union or employee may demand a higher wage rate from the employer and may not declare a dispute or embark on industrial action in respect of any such demand.

However, despite the fact that employers are not in any way obligated to entertain such demands, the purpose of collective bargaining is to set the minimum industry standards for conditions of employment which employers must adhere to. Therefore, it is our view that employers may exercise a discretion to reward particular employees for the value they add or in order to retain scarce skills within the business. It is simply good business practice to secure the employment of employees who are assets to the business.

It should be reiterated that an employer should not bargain with any employee or trade union in respect of conditions of employment regulated by the main agreement, but there seems to be no bar on an employer to either voluntarily increase wages, or to entertain a request from an employee or their trade union for a higher wage, with the understanding that it is completely within the discretion of the employer to accede to such a request and that refusal to do so holds no legal consequences for the employer.