There is a light at the end of the tunnel for Evraz Highveld Steel and Vanadium.
Earlier this week the company announced the signing of an agreement with its unions and the Department of Labour which will see it minimise the impact of retrenchments on employees. Through this agreement, 600 staff has been placed on the Department of Labour’s Training Layoff Scheme (TLS) for six months from November 26 rather than being retrenched.
Under the TLS employees will have an opportunity to improve their skills set whilst also receiving a percentage of their remuneration. This will be funded by the UIF/MerSeta and National Skills Fund. Evraz Highveld will continue to assist employees through contributions to certain social benefits.
This agreement was considered the best alternative for employees following Commission for Conciliation, Mediation and Arbitration (CCMA) facilitated consultations with NUMSA, Solidarity and the Department of Labour at a time where Highveld would have had to implement a Curtailed Operating Mode which would have impacted 1 153 employees and possibly had 1 089 retrenched. The company had, on July 21, issued Section 189(3) and 189A notices to the affected employees. During the consultative process, the parties agreed to increase the number of positions in the COM structure to 1 182, whilst voluntary separation packages and early retirements were also offered. This resulted in the affected employees being reduced from 1 189 to 658 employees.
Commenting on the signing of agreement between the three parties, Johan Burger, Chief Executive Officer of Evraz Highveld said:
“We are delighted to have signed this historic agreement with Numsa and Solidarity as largest TLC scheme that has ever been registered with Department of Labour. In the spirit of the negotiations, the company has agreed to top-up the remuneration of those employees selected for the COM structure subject to adequate funding and agreed UIF stipend payments of the scheme. It is now imperative to allow the company and the employees to benefit from the scheme’s funds in the next few weeks whilst we resume operations for Highveld.”
He added:
“The conclusion of this agreement would not have been possible without the significant support and dedicated efforts by all those involved. I would personally like to thank the leadership of NUMSA and Solidarity, the Government departments who were instrumental in this agreement- the Department of Economic Development, CCMA, Department of Labour, UIF, merSeta. Last but not least I thank the Highveld Management and employees for their tireless efforts who have shown commitment that together we are able to reach significant milestones. We know that the road ahead is still uncertain and requires a lot of hard work to overcome the challenges facing the company.”
Evraz Highveld Steel filed for voluntary business rescue on April 14 and temporarily ceased production of steel making at its steelworks on July 20. This was primarily as a result of working capital constraints and reduced domestic demand in steel mainly due to a significant increase in Chinese imports.
