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UPDATE 3-S.African building workers agree to end strike

Published 07/15/2009, 12:14 PM
SOLJ
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* Strike has disrupted work on soccer stadiums

* Wave of strikes raises pressure on Zuma

* Agreement for 12 percent wage hike signed

(Adds signing, details)

By Alison Raymond

JOHANNESBURG, July 15 (Reuters) - South African construction workers agreed on Wednesday to end a week-long strike that disrupted work on 2010 World Cup soccer stadiums and added to union pressure on new President Jacob Zuma.

The National Union of Mineworkers, which includes building workers and was the main union involved in the dispute, signed an agreement that gives workers a 12 percent wage increase and does not bar them legally from further strike action.

"The strike will be called off immediately ... and the workers will be expected to report for work on Thursday," Thamsanqa Matosa, deputy president of the National Union of Mineworkers, said.

Workers downed tools for a week, paralysing work on 2010 World Cup soccer stadiums and on the mass transit Gautrain high-speed rail project serving the area around Johannesburg.

The strike had raised concerns about whether South Africa would be ready for the World Cup tournament and hit shares in construction companies such as Murray & Roberts, WBHO and Group Five.

But Schalk Ackerman, a spokesman for construction and engineering employers' association SAFCEC, said he was confident the stadiums would be finished by the end of 2009 as planned.

Construction shares rose on Wednesday, in line with a stronger JSE All-share index.

The deal comes as unions threaten strikes in other important sectors, including gold, raising pressure on Zuma, who took office in May and is battling the first recession in 17 years.

The signing was held up after companies tried to include a clause banning any further strikes until after the tournament, but NUM's Matosa said there was "no such clause in the agreement".

South African unions helped propel Zuma to power and, emboldened by him taking office, have demanded big wage rises in recent weeks.

But Zuma has little room for manoeuvre given the lacklustre economy. Companies, too, are battling a slump in demand and are under pressure from shareholders to curtail costs.

A major union announced strikes in the paper, energy and chemical industries on Tuesday and another said action in the important gold sector was "highly likely".

The smaller Solidarity union said on Wednesday it may also consider striking in the industrial chemicals sector if members decided not to accept a wage hike offer of 8 percent. A strike in the sector would affect Afrox, Sasol and Omnia, it said. (Writing by Rebecca Harrison; Editing by Lin Noueihed)

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