Johannesburg – AngloGold Ashanti has reached a three-year wage deal with the majority of its employees in South Africa, providing certainty to operations that accounted for little over a quarter of its total production past year.
The National Union of Mineworkers (NUM), Solidarity and the United Association of South Africa (UASA) today accepted AngloGold Ashanti’s offer (detailed below). These unions comprise the majority of the Company’s workforce in South Africa at around 59%, with non-unionised employees increasing that figure to 66%. Under South Africa’s Labour Relations Act1, the increase agreed will be extended to all employees, regardless of union affiliation.
The Association of Mineworkers and Construction Union (AMCU), which represents 35% of employees, has rejected the offers made by all companies in the industry’s collective bargaining process, including AngloGold Ashanti.
“We’re pleased to have reached this agreement after several months of constructive negotiation,” Chris Sheppard, AngloGold Ashanti Chief Operating Officer: South Africa, said. “The aim of the deal is to provide employees with a fair increase whilst providing our operations with a degree of certainty at a very challenging time for the industry.”
The parties agreed on the following wage-related points:
- Category 4-8 employees and B-lower officials, an increase of R750 per month in year 1, R775 per month in year 2 and R800 per month in year 3, as well as a R100 per month increase in living-out allowance in year 1.
- Miners, Artisans and Officials, an increase of 6% on standard rate of pay in year 1, and 6% or CPI (whichever is the greater) in years 2 and 3.
Guaranteed wages for entry-level employees excluding bonuses and overtime, will therefore rise to around R106,000 per annum in the third year of the agreement. In addition, incentive-based pay in the gold industry, in the form of bonuses and overtime, comprises a significant portion of the total wage bill and can materially increase employees’ cash remuneration.
The following additional non-wage points have been agreed by all companies:
- Increase in medical incapacity benefit from R40,000 to R55,000 over three years.
- Medical aid contribution rates to remain at 60% for employers and 40% for Category 4-8 employees for three years from the date of agreement.
- Increase in current guaranteed minimum severance pay from R20,000 to R30,000 over three years.
- Extension of retirement age for surface workers to 63 years, subject to meeting company medical examinations and fitness-to-work assessments as required, provided that employees who wish to retire at 63 or before 63 shall be entitled to do so.
- A task team will be established to investigate the extension of retirement age for underground employees from 60 to 63 years. The task team must complete a written report on its findings and recommendations within six months.
- Increases in the funeral cover for certain employment categories.
- An agreement that the parties will engage over a three-year period on the issue of securing the sustainability of the sector and operational efficiency.
Extension of agreement
The NUM, UASA and Solidarity collectively represent the majority of employees at AngloGold Ashanti, and around 62% of employees in the gold industry represented by the Chamber of Mines. A further 7% of employees are not unionised. As a consequence, and in terms of the Labour Relations Act, AngloGold Ashanti will extend the agreement to all employees within the bargaining units, irrespective of their union affiliation.
In terms of the ‘peace clause’ contained in the agreement, there can be no industrial action concerning terms and conditions of employment during the existence of the agreement, as the issue of conditions of employment has been settled for the duration of the agreement, and no demands may be made during the course of the agreement. Accordingly, any industrial action concerning terms and conditions of employment during the existence of the agreement will be in contravention of the ‘peace clause’ and thus unprotected. AngloGold Ashanti will engage with all unions, including AMCU on the implementation of the wage agreement.