By Lehlohonolo Lehana.
ArcelorMittal South Africa (AMSA) confirmed that it had applied for leave to appeal a Labour Court judgment stipulating that retrenched workers from its longs operations in Newcastle and Vereeniging be reinstated.
The steel producer argues that it has complied with its obligations to consult fairly, and that any further delay in winding down the business would have put the entire company at risk.
The retrenchments will affect over 3500 direct jobs and 100,000 indirect jobs along the value chain. AMSA attributes the retrenchments to high energy costs, cheap imports, and logistics challenges on transportation.
The long steel making company issued a retrenchment notice for workers at its operations in Newcastle and Vereeniging in January this year but before consultations were concluded the AMSA retrenched workers on October 21.
This prompted the National Union of Metalworkers of South Africa (NUMSA), which is the majority union at the company, to apply for an urgent interdict at the Labour Court to protect the interests of the workers.
The Labour Court order, issued on 27 October, ruled in favour of NUMSA, an affiliate of IndustriALL Global Union, stating that AMSA must follow a fair process by engaging with the union in negotiations over the retrenchments, and to start fair consultations within 10 days.
The court said all dismissed workers must be reinstated and paid for the period they were retrenched.
In a further cautionary announcement to shareholders, AMSA has confirmed that production has ceased at the Newcastle, and that the process to place its long-steel business and maintenance is proceeding.
The JSE-listed company said that limited trading would continue to “despatch the remaining stock”.
Engagements to explore alternative solutions continue. “Further announcements will be made in relation to these matters as and when appropriate,” AMSA said amid reports suggesting that the company could be sold.
“Accordingly, shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made.”