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The Labour Court in Johannesburg has set aside the 2011-2014 metal sector wage agreement, the National Employers' Association of SA (Neasa) said on Thursday.
The 2011-2014 wage deal was the result of an agreement between the Steel and Engineering Industries Federation of SA (Seifsa) and trade unions, spokeswoman Sya van der Walt-Potgieter said in a statement.
The labour minister extended the agreement to employers not party to the agreement.
"Neasa has continuously pointed out the unconstitutionality and administrative incompetence, in various respects, of that agreement," Van der Walt-Potgieter said.
"Over years Neasa's arguments were ignored by the MEIBC secretariat, the parties to the MEIBC, as well as [Labour] Minister Mildred Oliphant."
In setting aside the 2011-14 agreement, the Labour Court found the agreement which the labour minister extended was not concluded under the auspices of the Metal and Engineering Industries Bargaining Council (MEIBC), Van der Walt-Potgieter said.
"The court also severely criticised the MEIBC and the department of labour for the irregular way in which it sought extension to non-parties of the Seifsa/trade union agreement."
Neasa CEO Gerhard Papenfus said the 2011-2014 wage agreement was illegally obtained and extended to non-parties.
"The MEIBC enforced the terms of this illegal arrangement, mercilessly pursued struggling businesses, which caused many businesses to close their doors," he said.
"During the three year period of this agreement the metal industry became less competitive and unemployment hugely increased. All this has happened while an illegal arrangement was enforced on SMME's."
In light of the negative impact the previous agreement had on the industry, Neasa found it "absurd" the MEIBC sought to also extend the latest agreement, signed in July this year by Seifsa and trade unions, to those not party to that agreement.
Neasa was fighting the extension of the July 2014 agreement.
At the beginning of December, Neasa filed an urgent notice to appeal a Labour Court ruling allowing the extension of the 2014-2017 agreement.
Neasa had previously lost a court application on December 1, which formed part of its bid to stop the extension of a wage agreement to other unions.
Seifsa signed the agreement on July 29 on behalf of the 24 federated associations and two associations that were still involved in internal mandating processes.
In terms of the three-year agreement workers would get increases of between eight and 10 percent in the first year, 7.5 to 10 percent in the second year, and seven to 10 percent in the third year.
Neasa members wanted a standardised entry-level wage and a revamped exemptions policy. It offered an eight percent across-the-board salary.