Deal ‘close’ to end massive South African strike

South Africa’s labour ministry said Monday a wage deal was “very close” as government remained locked in intensive talks to end a strike by more than 200,000 South African engineering and metal sector workers.

Labour Minister Mildred Oliphant held talks with representatives of the estimated 10,500 firms affected earlier Monday and was scheduled to hold a late night meeting with workers’ union NUMSA later.

“Talks have reached a sensitive stage,” said ministry spokesman Mokgadi Pela.

Strikers, who have been off work for a week, recently rejected a one year pay deal that would have given workers a 10 percent wage increase.

The union has hinted a “double digit” pay rise might be acceptable, but it also wants a ban on recruitment agencies for temporary workers and tax breaks for employing young workers.

It has demanded a one year deal rather than the three years being offered by employers and also wants increased housing allowances.

“In term of a wage percentage the parties are very close to an agreement,” said Pela. “However there are sticking issues around labour broking, youth wage subsidies, and housing, among others.”

Direct talks between the two sides have tentatively been planned for Tuesday, raising hopes that an agreement may be in sight.

South Africa’s government is keen to end the strike as soon as possible.

The economy contracted in the first quarter thanks to a five-month-long platinum sector strike, which was resolved just days before metal and engineering workers downed tools.

Recession is a very real possibility.

The latest stoppage has halted production at major firms like GM and has led ratings agency Moody’s to warn that a further credit downgrade could be on the way.