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South African union signs wage deal

According to the three-year wage deal signed on 12 September, which expires in 2022, workers in the sector will receive a nine per cent increase in 2019 and seven per cent increases in the following years. The wage increases will also be adjusted annually to inflation levels and transport allowances will increase from R1540 to R2500 (US$105 to US$171).

The deal includes other benefits such family responsibility leave, and payments in the event of temporary layoffs. A once off gratuity of R7500 (US$510) will be paid to workers in the bargaining unit. Further, discussions between the union and the employers will finalize proposals on medical aid and skills grading.

Irvin Jim, NUMSA general secretary says:

“Our negotiation team worked tirelessly to get us to this point of the talks, and we are grateful to them for their hard work.”

Georg Leutert, IndustriALL automotive director says:

“We applaud the collective agreement signed by NUMSA and AMEO as this continues to improve working conditions in South Africa’s automotive sector. As the sector embraces Industry 4.0, we also commend the skills development initiatives that are benefitting the workers.”

As the largest manufacturing sector in South Africa, contributing to nearly 30 per cent of manufacturing, and producing over 600,000 vehicles per annum, the automotive sector is important to the economy. The sector contributes about 6.8 per cent of the country’s gross domestic product. Further, it employs over 100,000 workers along the value chain, and contributes to skills development, technology and innovative, and foreign direct investment.
South Africa’s automotive sector includes manufacturing, distribution, servicing and maintenance of motor vehicles and components. The Automotive Production Development Programme (2013), which will be replaced in 2020 by the South African Automotive Masterplan, supports original equipment manufacturers (OEMs) and aims at focusing on producing for the export market. The programme gives the OEMs subsidies such as duty rebates to increase the local content of South African produced cars which is currently at 37 per cent.


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