THE National Employers' Association of SA (Neasa) has accused another employer body, the Steel and Engineering Industries Federation of SA (Seifsa), of bullying small and medium-size industries (SMEs) in the metals and engineering sector over the most recent industry wage agreement.

Fears were expressed that the dispute could harden attitudes and fuel industrial action in the sector.

Neasa claims there is no legal requirement for its member companies in the sector to adhere to the second part of a three-year wage agreement ending in mid-2014, which sets wage increases of 7% and 8% for skilled and unskilled workers respectively.

However, Neasa, with about 10% of members in the metals and engineering sector, says it is contesting only a technical point, and is not encouraging its members to flout the agreement.

Instead, it says it is seeking legal clarity on why its members should comply after it had not signed the agreement concluded between Seifsa and six unions through the statutory Engineering Industries Bargaining Council, although it also sit s on the council.

It also contests the legal basis by which the minister of labour subsequently extended the agreement to all parties. But Seifsa says Neasa's actions may lead to a perception that workers will not receive their annual wage increases, and this could destabilise the sector.

"To raise the fear that workers in the industry will not receive an increase because of an alleged technicality is grossly irresponsible," Lucio Trentini, operations director at Seifsa, said yesterday.

He said this ran the risk of fomenting industrial unrest at a time SA had seen deadly violence in both the metals and engineering sector and the related mining industry.

He also said while Neasa "may well have a point", until that was tested in court, the wage agreement as reflected in the Government Gazette "stands and is effective".

Earlier this week, Seifsa issued an urgent notice stating "notwithstanding conflicting statements issued by Neasa", the industry's wage increases ranging from 7% to 8% remain effective and all member companies were urged to implement these with effect from July 1.

"There is no doubt (the current bargaining system) is hostile to SMEs," Gerhard Papenfus, CEO of Neasa, said yesterday.

He said this arrangement was protected by government, and that the bargaining council was also not a neutral party in the issue.

In an earlier statement yesterday, Mr Papenfus, said the council was the "engine-room of manufacturing in SA", but was dominated by an "unholy and unhealthy" relationship between dominant trade unions, on one part and SA's largest industries on the other side.