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November : National Minimum Wage Negotiation Developments

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23 November, 2016

National Minimum Wage Negotiation Developments

Below is an article that appeared in the Business Day online newsletter regarding the above.

In brief, the National Economic Development and Labour Council (Nedlac) advisory panel report came up with the following recommendations:

  1. That a national monthly minimum wage of R3 500 be legislated (Agriculture & Forestry minimum wage currently  R2 779.83 per month - if implemented, it  would mean a R721.17 (or 26.0%) increase in the minimum wage currently paid).
  2. Strike ballots of affected trade union members be held before strike action was proceeded with (this will  hopefully curtail the incidence of and duration of strike action).
  3. That certain sectors, including agriculture and forestry, be given special dispensation regarding the implementation of any national minimum wage legislation implemented (we don't know what this will result in at this stage).

Ever since the proposal to introduce a national minimum wage was Gazetted, FSA has, through its submissions to DoL, repeated stressed that the introduction thereof, if set at what the unions wanted (up to R14 500 per month) would lead to huge job losses in our Industry.  Although negotiations are still continuing regarding what the eventual national wage will be set at, FSA's submissions, as well as those of AGRI SA and BUSA have, I am sure, helped to moderate the level at which the national minimum wage will be set.

From the pronouncements made in the press yesterday, it looks like FSA's endeavours  (and that of AGRI SA & others) have paid off - this could potentially save the Industry tens of Millions of Rands per annual and, more importantly, save the jobs of thousands of workers.

We will of course have to see what the minimum wage for agricultural / forestry workers will be (currently R2 778.83 per month).  FSA's standpoint was that a national minimum  wage, if introduced,  should only apply to workers who are not currently covered by a "Sectoral Determinations" - which includes agricultural and forestry workers.  It seems as if the parties at Nedlac have accepted this standpoint.Members will kept up to date with any further developments.


National minimum wage: all the reaction

The broad agreement between business, labour and government reached at the weekend, clearly does not apply to the actual amount on the table


Business Day

The release of the National Economic Development and Labour Council (Nedlac) advisory panel report, which includes a proposed monthly minimum wage of R3,500, has elicited a mixed reaction from trade unions and political parties.

The ANC welcomed the report, which was released on Sunday, saying recommendations were "sound, credible and clearly supported by clear evidence, including technical submissions" made by business, labour, government and communities.

"Now that a quantum has been proposed, Nedlac constituencies need to have an opportunity to engage with the proposals contained in the report, including the proposed level of the national minimum wage," spokesman Zizi Kodwa said.

"The constituencies are urged to proceed with urgency so that finality and certainty can be achieved."

The ANC said it was particularly pleased that Nedlac was about to finalise a package that would reduce prolonged and violent strikes.

In contrast, the EFF rejected the proposed national minimum wage of R3,500 a month, saying that it favoured business at the expense of workers. The party also said the proposal was against the exclusion of domestic and farm workers.

"The proposal will not lead to the desired resolution of the problem of inequality, instead it is going to institutionalise these inequalities at low poverty wages," spokesman Mbuyiseni Ndlozi said.

The EFF had tabled a minimum wage of R4,500 a month in Parliament based on figures from 2014.

"Any minimum wage that is below R4,500 will not make any difference to the lives of workers or the resolution of inequality in wages and actual living conditions," Ndlozi said.

The Food and Allied Workers Union (Fawu), which recently announced that it was breaking away from labour federation Cosatu, welcomed the agreement on a proposed national minimum wage, but was against the amount of R3,500 a month.

Fawu proposed a national minimum wage of R5,700 a month.

"We are concerned that the proposed figure of R3,500 seems to be ignorant of or indifferent to this country as the widest unequal society on earth, in terms of income distribution, and with abnormal poverty and unemployment rate given its stage of economic development and endowment of natural resources and mineral deposits, such as 70% of the world's platinum," general secretary Katishi Masemola said.

"Therefore, we will push for the [national minimum wage] to be as low as R5,700 a month and for that, as Fawu, we will not only make submissions but wage campaigns because this country cannot afford to be the case study of treble-challenges and social ills of only 20% in quality [private] healthcare, selective access to education to the elites (5% of the population) as those from poor and working class backgrounds and so-called missing-middle are either financially excluded or even academically excluded."

Farmers' group Agri SA welcomed the proposed exemption for the farming sector.

Agri SA called for "for in-depth research and consultation with all agricultural role-players‚ especially farmers in drought-stricken areas".

Its chairman, Neil Hamman‚ said on Monday that "whilst labour cost is a major cost driver‚ a contented labour force is equally essential for optimum production".

"Compromising the intricate balance between wages and the sustainability of farming enterprises will, however, result in unintended consequences such as job losses and mechanisation‚" he said.

Hamman said: "Agri SA welcomes the fact that struggling farmers still will have access to section 50 of the Basic Conditions of Employment Act that makes provision for exemptions from ministerial determinations.

"We also welcome the fact that the expert advisory committee recommended that a lower mean apply to domestic and farm workers‚ depending on the circumstances."

Worst of both worlds
The Institute of Race Relations says R3,500 a month it too low to really improve the circumstances of existing workers, but is high enough that it will create obstacles to job creations and the establishment of small businesses.

Source: Forestry South Africa / Business Day