Harmony Gold signs historic 6% wage deal with all unions

HARMONY Gold on Thursday said it had signed a five-year wage deal with unions for a 6% per year increase including benefits, effective from July.

The agreement is significant as it is with all unions simulltaneously, the first time this had been achieved by the company in its history.

Negotiations, which took three months and were without incident, were with the Coalition (comprising the National Union of Mineworkers, UASA and Solidarity) as well as the Association of Mineworkers & Construction Union and the National Union of Metalworkers of South Africa.

“For the first time in our 73-year history, we have concluded a five-year wage agreement with all of our labour unions,” said Peter Steenkamp, CEO of Harmony Gold. “This is testimony to the strength of our labour relations and ensures stability and continued certainty on our fixed labour costs for the next five years.”

Harmony this week breached the R100bn market capitalisation as the dollar gold price tested a record $2,300 per ounce. This is the compamy’s highest market valuation in more than 22 years.

The agreement allows for a wage increase of R1,200 per month in the first year of the deal with entry level (category 4 to 8) employees increasing to R1,500 per month in the fifth year of the deal. B-lower employees will receive R1,200 per month increases, or 6.2% (whichever is the higher) in the first year up to a wage improvement of R1,500 per month or 6.5% or CPI (whichever is greater) in the final year of the agreement.

Miners, artisans and officials will receive a wage increase of 6.2% in the first year increasing to  6.5% or CPI (whichever is greater) in year five.

Monthly housing allowances will increase from R3,360 in the first year to R4,020 in the year five of the agreement while the living-out allowance will increase R100 in the first year to R2,800 to an increase of R150 to R3,350 in the last year of the five year deal.

The wage deal will result in an increase of about 6% a year from July 2024 to 2029 which was “within our planning parameters”, said Harmony.

“This milestone agreement has been reached three months before the existing agreement’s expiry. It is fair and balanced, considering the impact that increases in the cost of living are likely to have on employees over the next five years,” said Steenkamp.