THE danger of a strike in South Africa’s platinum sector all but diminished after Anglo American Platinum (Amplats) signed a new, three-year wage agreement with the Association of Mineworkers & Construction Union (AMCU).
The Anglo American listed subsidiary said today it had agreed an annual increase of R1,000 or 7% – whichever was the greater – per month in basic pay.
Increases ranged from 12.5% for the lowest paid employees to 7% for other bargaining unit employees in higher level bands, the company said. The agreement will be applied retrospectively effective from July 1.
As a result of AMCU’s acceptance, the agreement has been extended to the National Union of Mineworkers, the United Association of South Africa and non-union affiliated employees.
The agreement is a huge fillip for Amplats which was anxious to avoid another prolonged strike. In 2013, AMCU led a five-and-a-half month strike which cost the industry more than R30bn and was characterised by intimidation and violence.
Impala Platinum, which today issued its September quarter production report, is yet to reach and agreement with AMCU or the NUM but the deal with Amplats suggests AMCU members have no appetite for a strike.
“We are pleased to have reached an agreement following a constructive and collaborative negotiation process,” said Chris Griffith, CEO of Amplats.
“The current economic environment continues to place significant pressure on platinum mining companies, as well as mineworkers, and we are glad to have achieved an agreement that is fair to our employees,” he said, adding that it would benefit the lowest paid workers the most with a 12.5% increase in basic pay.
The agreement will result in an increase in the labour cost, with a cost-to-company increase of 6.71% in year 1, 6.56% in year two and 6.96% in year three, or 6.74% on average over the three year period.
Other elements of the agreement are:
- Living out allowances, housing rent subsidies and home ownership allowances increase by R120 per month for each year of the three year agreement;
The employer’s medical aid contributions will increase by 6.4% from 1 January 2017 and on the first of January for each succeeding year of the wage agreement by 5.5%. The pensionable emolument bases for retirement and provident funds will increase by 6.4% from 1 July 2016 and 5.5% for the second and third year of the agreement;
The Holiday Leave Allowance (HLA) (thirteenth cheque) increases by the same percent as the basic wage, however off a lower base. The base will increase over the three years to end at the same level as the basic monthly wage at the end of the agreement period. Other allowances have lower increases.
