The wage agreement in the metal and engineering industries was the death knell for small businesses, the Free Market Foundation (FMF) said on Wednesday.
"The recent developments in the negotiations reflect the unholy alliance between unions and big business. Big businesses (represented by Seifsa) have agreed to increases for the next three years without being concerned about the impact on small businesses. The reality is that this agreement sounds the death knell to thousands of smaller companies in the sector," FMF chairman Herman Mashaba said.
Six unions in the metals and engineering sector signed a wage deal with most employers on Tuesday. In a three-year deal, wages will increase by 8% to 10% in year one, 7.5% to 10% in year two and 7% to 10% in year three. But, one of the employer bodies, the National Employers' Association of SA (Neasa), representing smaller firms, refused to sign the offer, saying it had been sidelined in the negotiation process, which had been facilitated by the labour department. Mashaba said Neasa was refusing to sign because it saw through the agreement and the devastating impact it would have on smaller firms and employment prospects.
"As an entrepreneur and businessman, I know firsthand the risks of employing even one extra worker," Mashaba said. He called on Small Business Development Minister Lindiwe Zulu to take action by intervening to prevent the agreement from being extended to non-signatories falling under the sectoral bargaining council.
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