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National Minimum Wage update

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National Minimum Wage update

7th June 2018

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The National Assembly has recently passed three bills namely the National Minimum Wage (NMW) Bill, the Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill.

Stakeholders have one last chance to make written submissions where after these bills will be placed before the National Council of Provinces for concurrence before being signed into law.

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Once passed, these laws will have important consequences for employees and employers alike across all sectors. We take this opportunity to provide a basic overview of their key provisions.

The minimum wage will apply to all workers defined as any person who works for another and is entitled to payment either in money of kind. Only employees of the South African Defence Force, the National Intelligence Agency, the South African Secret Service and volunteers are excluded.

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The NMW Bill sets a minimum wage of ZAR 20 per ordinary hour worked. This wage will be reviewed within 18 months of the commencement of the NMW Act and will be adjusted within two years of the commencement of the Act.

  • The calculation of a wage is the amount payable to a worker in money for ordinary hours of work. Any payment to enable the worker to work (unless specified otherwise in a sectoral determination), any payment in kind (unless specified otherwise in a sectoral determination) and gratuities, bonuses, tips and gifts are excluded in the calculation.
  • The minimum wage cannot be waived, will take precedence over a contrary provision of a contract of employment, collective agreement, sectoral determination or law and will constitute a term of the employment contract unless the contract of employment, collective agreement or law is more favourable.
  • Farm workers, domestic workers, learners employed in terms of the Skills Development Act and workers on expanded public works programmes have different minimum hourly rates which will apply from a date to be fixed by the President.
  • The NMW Act establishes a National Minimum Wage Commission and provides a procedure for employers to apply for exemption from paying the national minimum wage.
  • Draft regulations have been published for comment dealing with the process to apply for exemption. Exemption may only be granted if the employer cannot afford to pay the minimum wage and after meaningful consultation with every trade union representing affected employees or the affected employee him/herself in absence of a trade union.

The Basic Conditions of Employment Amendment Bill incorporates the NMW Act into the basic conditions of employment and the definition of employment law. It will also provide for the payment of a daily wage for employees who work less than four hours a day and who earn below the threshold.
In terms of enforcement:

  • Labour inspectors powers and functions will be extended to monitor and enforce compliance with the above amendments. Labour inspectors will also have the power to refer disputes concerning non-compliance to the Commission for Conciliation, Mediation and Arbitration (CCMA) and to appear at the CCMA in these disputes.
  • The CCMA will be given the jurisdiction to make a compliance order an arbitration award. The CCMA will also have the power to issue an award requiring the employer to comply with a compliance order issued by a labour inspector.
  • The CCMA will be given jurisdiction to conciliate disputes concerning the failure to pay any amount owing to the worker in terms of the above amendments, a contract of employment, collective agreement or sectoral determination referred to it by employees earning below the threshold. For employees earning above the threshold a claim may be instituted in the Labour Court, High Court, Magistrates Court or Small Claims Court.
  • A dispute referred to the CCMA concerning the failure to pay any amount owing to the worker in terms of the above amendments, a contract of employment, collective agreement or sectoral determination will be subject to the con/arb process and must be arbitrated immediately upon the dispute being certified as unresolved.

The significant changes to the Labour Relations Amendment (LRA) made by the LRA Amendment Bill deal with:

  • The extension of collective agreements concluded at bargaining councils.
  • The prohibition of pickets without picketing rules in place. Commissioners of the CCMA will have the power to establish rules where the parties are unable to agree.
  • Secret ballots of members by trade unions before embarking on strikes.
  • State intervention in protracted and violent strikes with the establishment of an advisory award panel to facilitate the resolution of unresolved disputes.

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