Ispat Iscor Limited recently confirmed that it had reached an agreement on a final wage offer with the Solidarity trade union.

The wage offer comprises a guaranteed increase on basic remuneration, and a variable performance component, which is based on the achievement of individual and operational targets.

The final negotiated wage settlement consists of a guaranteed 5% salary increase, as well as a variable pay component, which could amount to a total 8.5% increase for lower salary grades, and a 6.9% increase for higher grades in the company's employee bargaining category.

The company said that the settlement also contained a mechanism to create parity among comparable jobs at the company's various operations. Consequently, employees who are earning above the maximum of their salary grades will, in lieu of the salary increase, receive a once-off payment equivalent to 12 times the monthly increase they would have earned.

This will apply for two subsequent years, in which the once-off payment will equal six times the monthly increase they would have earned. It is expected that within this three-year period their salaries will once again fall within their respective ranges due to the overall salary grade adjustments.

Ispat Iscor's Corporate Affairs Executive Phaldie Kalam said the company was delighted that a wage settlement had been reached with the labor unions, particularly since the parties saw fit to extend the agreement over the next three years.

The current wage settlement will therefore be applicable until 2007, and guarantees a wage increase of CPIX for Ispat Iscor employees in the bargaining category over and above the variable performance pay employees can earn.

Ispat Iscor Limited is South Africa's leading steel producer.