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Labour Minister fails to increase overtime threshold adequately

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Labour Minister fails to increase overtime threshold adequately

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Minister of Employment and Labour Thulas Nxesi

10th February 2021

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Minister of Employment and Labour, Thulas Nxesi, failed to adequately address the threshold of the Basic Conditions of Employment Act (BCEA) by only implementing a mere 3 % increase (R6 163).

The Minister announced in the Government Gazette published last night that the threshold will increase from R205 433.30 per year to R211 596.30 per annum with effect of 1 March 2021.

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Steve Harris, General Secretary of UNTU, says this announcement is disturbing and very disappointing for all the employees of Transnet and the Passenger Rail Agency of South Africa (PRASA) as it will allow their employers to continue exploiting them when they must work overtime due to the operational requirements of the businesses.

UNTU have been at the forefront of fight to adequately increase the threshold of the BCEA with more than R100 000 per annum or to exempt Transnet and PRASA employees from it for the past five years, leaving no stone unturned to put pressure on the various Labour Ministers to review and increase it.

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UNTU made inputs to the National Minimum Wage Commission through its affiliated federation, the Federation of Trade Unions of South Africa (FEDUSA), as to why it would be justified to exempt Transnet employees and PRASA employees from the threshold.

According to Harris the threshold has been stagnant on R205 433.30 per year since the 1st of July 2014. 

“By not increasing the threshold for five years, Government allows employers to abuse vulnerable employees who is not being protected by the act when it comes to overtime work.

“The fact that workers who earned above the threshold are being forced to work overtime in return for less than half of the time worked has made news headlines numerous times over the past five years where workers, like the firefighters of the City of Cape Town on 26 September 2019, held marches to handover memorandums to the Department of Labour demanding fair compensation for their work.

“In the Transnet Ports environment, which operates the heart of the South African economy to ensure that imports and exports continue, the injustice of forcing employees to work overtime over weekends while earning less than half their normal wage, has resulted in numerous illegal strike actions by employees to the detriment of the South African economy,” says Harris.

According to Harris the 3% increase will still not protect workers whose scarce skills desperately needs to be retained for the country, from being exploited unless they are given the option to decide whether they want to work overtime or not and employers are no longer allowed to force them to work overtime due to operational requirements, especially in the Transnet environment which is a 24/7 operation.

“The provisions of the current Act might be sufficient to protect the poorest of the poor and vulnerable employees like domestic workers and farm workers but is insufficient to protect the average worker. Transnet uses the computerised job grading system JE Manager to create pay grades. Employees on Level K earn above R550 000 per year. Employees from Levels K to G are expected to work overtime in return for less than half their normal wage and that is the crux of the problem.” 

Harris says the new threshold furthermore results in the gross exploitation of contract and/or fixed term workers in the Transnet environment referred to as rail, maintenance, and equipment (RME). 

Section 189B of the Labour Relations Act (LRA) regulates in what circumstances employees maybe employed on a fixed term basis. Importantly, employees may only be so employed for a period more than three months (if they earn under the threshold of R211,596.30) if the nature of their work is of a limited or definite nature or there is another justifiable reason for the use of such contracts.

“The vast majority of RME contract workers earn above the current threshold. This allows Transnet to appoint them for a fixed term for a specific contract. When the contract lapses, Transnet waits for a period of between one to three months before appointing them on another fixed term contact.

“Some of them have been appointed on fixed term contracts without the option of being permanently employed for the past twenty years. There are about 4 000 RME employees who will at this rate never enjoy the benefits of a permanent employee such as a pension fund and a medical aid although they are in fact permanently on fixed term contracts of Transnet,” says Harris.

Issued on behalf of UNTU

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