Metal and engineering industry workers' wage increases will keep pace with inflation until 2010, the United Association of SA (UASA) said today.

"We are extremely pleased and grateful to announce that an alternative agreement was reached this [Friday] morning," said Tim Kruger, divisional manager for metal and engineering at UASA.

Although a three year wage agreement was signed in 2007 based on a 7,1% and 8,1% increase for category A and H employees respectively, UASA said it had initiated talks with employer organizations under the auspices of the Metal & Engineering Industry Bargaining Council (MEIBC) with a view to agree on additional salary adjustments, equal at least to the current CPIX.

"The motivation for the talks was the unforeseen electricity crisis, increased interest rates, the sky-rocketing oil price, escalating inflation - all factors that have a shattering effect on the expendable income of workers and their quality of living.

"If the annual wage increases were to remain on the levels agreed upon for three years in 2007, the long-term consequences would be devastating," Kruger said.

Wage increases would not be only 7,1% and 8,1% in the two categories, but equal to the year-on-year CPIX, with a guaranteed minimum of 7,1% or 8,1%, whichever was the higher.

This meant that the year's increase would amount to 10,4%, Kruger said.

Source: Sapa