South Africa’s metal workers call off major strike

South African striking engineering and metals workers have accepted a three-year wage offer to end the country’s largest-ever labour stoppage, their union said Monday.

Representatives for the roughly 200,000 workers who downed tools on July 1 said the lowest-paid worker will get a 10 percent pay increase each year for the next three years.

Their union, — the country’s largest, representing workers across several sectors — had been demanding a rise of up to 15 percent in a one-year deal.

“The settlement offer has been overwhelmingly and unanimously accepted by our members,” Irvin Jim, general secretary of the National Union of Metalworkers of South Africa (NUMSA), told reporters, adding that workers will return to their posts on Tuesday.

Jim described the increase, which is above the inflation rate of 6.6 percent, as a “massive victory” compared to the “pittance” the companies had once offered.

The offer, brokered by Labour Minister Mildred Oliphant, had been made last week. But attempts by the companies to prevent further bargaining at individual company level meant it took a few more days before a deal was sealed.

A compromise was then secured to allow workers at plant level to negotiate or even strike over any other issues not related to the Monday’s agreement.

Employers’ representatives welcomed the end of the strike.

“We are immensely relieved that the strike is finally over,” Kaizer Nyatsumba, chief of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said.

– A costly strike –

The strike had cost the industry an average 300 million rand ($28 million, 21 million euros) a day.

Auto makers Toyota and General Motors had reported disruptions to production due to a shortage of components.

South Africa’s supply of building materials had also been affected by the strike, slowing down work at construction sites across the country.

The work stoppage hit an estimated 10,500 companies worth an aggregate four percent of economic output, threatening the country’s already stuttering growth.

The South African economy shrank in the first quarter amid a five-month-long strike in the country’s platinum mines that pushed the country to the brink of a recession.

The metal workers’ strike had kicked off just days after the end of the walkout by some 70,000 platinum mine workers which was resolved only last week.

South Africa’s annual growth has been on a weak streak in recent years, slowing from 3.6 percent in 2011 to 2.5 percent in 2012 and 1.9 percent last year.

Analyst Peter Attard Montalto of Japanese bank Nomura saw the new wage agreement adding “a degree of stability in the economy, but only marginally”.

“We are probably entering a period of relative quiet now on the economy-disrupting wage/strike action front,” he added.

But a group representing small- and medium-scale companies, the National Employers Association of South Africa (NEASA), has rejected the “unsustainable” settlement, warning it will lock out any workers that try to report for duty on Tuesday.

It said in a statement that it “is extremely dissatisfied with the settlement” secured by SEIFSA, NUMSA and five other unions.

NEASA said it can afford only an 8.0 percent across-the-board pay increase.