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Mittal faces revolt in South Africa

The National Union of Metal Workers has decided to launch a series of stirs against Mittal Steel's lay off policies.

india Updated: May 28, 2006 11:59 IST

Even as it is smarting from the blow to its pride following Arcelor's decision to merge with Russia-based Severstal, Mittal Steel faces a possible revolt by union workers in distant South Africa against its lay off policies.

The National Union of Metal Workers of South Africa has decided to launch a series of protests against Mittal to force the government to intervene in the ongoing restructuring of Mittal Steel South Africa, which has resulted in the company laying off thousands of workers, its national spokesman Mziwakhe Hlangani said in an e-mailed statement.

NUMSA was irked by Mittal Steel for enforcing its retrenchment plans and "outsourcing of core operations as employees were forced to take retrenchment packages and were again re-employed with either less wages or no basic working condition benefits," he pointed out.

When asked to confirm, Mittal Steel denied the allegations and reminded that in 2004 the company signed a one-year no forced retrenchment pact with all its unions, which was again renewed for two years last year.

"NUMSA through its national office is a signatory to this agreement," Mittal Steel South Africa operations chief Tami Didiza said in an e-mailed statement.

Hlangani said NUMSA rated Mittal "as the worst selfish entrepreneur, a union basher who had no interest of the country at heart but wanted to cream off more profits in the country at the expense of stability and job creation."

Indicating that Mittal would not mend his ways, Hlangani said: "We anticipate more retrenchments, in the form of forced and voluntary retrenchments and that is why we decided to focus strike plans against Mittal Steel and also against auto those companies which planned to lay off several workers. 

He said NUMSA's has demanded that Mittal Steel stop its restructuring plans and take into consideration public service framework agreement, which considered social plans and re-training of the possible retrenches and should involve the labour government in talks on restructuring.

Didiza said: "The rationale behind signing of the agreement was to create a conducive environment whereby the company could achieve its labour optimisation objectives while protecting employees from forced retrenchments.

"This agreement provides the company with the flexibility to restructure operations and to re-deploy employees in order to achieve efficiency and resource optimisation."

He said the agreement also offers employees control over their own destiny in terms of their choice to remain in employment or opt for a severance package.

In terms of the agreement, the company reserves the right to make available voluntary severance packages at any time at its sole discretion and no employee can be forcibly retrenched during the tenure of this agreement, he said.

"In terms of the current process various task teams are established with a brief to research cost optimisation opportunities and make recommendations for optimal manning levels to management. Consultations are then held with the unions and employees on the recommended structures before these are implemented," Didiza said.

"The company's primary focus is to reduce costs and not necessarily to reduce a pre-determined number of employees," he added.