Judge Sean Snyman has granted a drastic court order to the trade union Solidarity in the Labour Court this morning. The court order entails that the Metal and Engineering Bargaining Council (MEIBC) must be placed under administration. The court order and application brought by Solidarity is the first of its kind in South Africa and will change the landscape in the steel and engineering industry dramatically.
Marius Croucamp, Deputy General Secretary of Solidarity, welcomed this history-changing court order. “The order is a necessary step to ensure that the MEIBC is rescued from going under. We believe that the appointment of an administrator will ensure that the MEIBC is saved from regress and will be financially sound again. The preservation of the Council is crucial for the stability of the steel industry that is already under severe pressure,” said Croucamp.
The administrator to be appointed will have to take major steps to sort out mismanagement and financial irregularities. Lately, the bargaining council has been trading whilst being technically insolvent owing to mismanagement. Creditors have been knocking on the door and threatening to liquidate the council. Important functions such as dispute resolutions have come to a standstill for months on end but will now be able to get on track again,” Croucamp explained.
The Department of Labour, NUMSA and employers’ organisations have agreed to the court order. “We are very pleased that important role players have finally agreed to the process of administration. The administration process can be compared with a business rescue process often used in the private sector to save a business from failing. The alternative was liquidation, which would not be in the best interests of the bargaining council.” Croucamp added.