Tag: minimum wage

Source: Supermarket & Retailer

The National Minimum Wage Act (NMWA) provides for, amongst others, a national minimum wage; the establishment of a National Minimum Wage Commission; a review and annual adjustment of the national minimum wage; and the provision of an exemption from paying the national minimum wage.

Who does the NMWA apply to?

The NMWA applies to all workers and their employers, except members of the South African National Defence Force, the National Intelligence Agency, the South African Secret Service; and volunteers who perform work for another person without remuneration. It applies to any person who works for another and who receives, or is entitled to receive, any payment for that work whether in money or in kind.

What is the national minimum wage?

The national minimum wage is R20 for each ordinary hour worked. There are, however, certain exceptions to the national minimum wage amount of R20 per hour.

Farm workers are entitled to a minimum wage of R18 per hour. A ‘farm worker’ means a worker who is employed mainly or wholly in connection with farming or forestry activities, and includes a domestic worker employed in a home on a farm or forestry environment and a security guard on a farm or other agricultural premises, excluding a security guard employed in the private security industry.

Domestic workers are entitled to a minimum wage of R15 per hour. A ‘domestic worker’ means a worker who performs domestic work in a private household and who received, or is entitled to receive, a wage and includes: a gardener; a person employed by a household as a driver of a motor vehicle; a person who takes care of children, the aged, the sick, the frail or the disabled; and domestic workers employed or supplied by employment services.

Workers employment on an expanded public works programme are entitled to a minimum wage of R11 per hour from a date that will be determined by the President in the Government Gazette. Expanded public works programme means a programme to provide public or community services through a labour-intensive programme determined by the Minister. And funded from public resources.

Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act 97 of 1998 are entitled to the allowances contained in Schedule 2 of the NMWA.

Employer’s should note that, within 18 months of the commencement of the NMWA, being 1 January 2019, the National Minimum Wage Commission, will review the national minimum wage of farm workers and domestic workers, and within two years, determine an adjustment of the applicable national minimum wage. The national minimum wage in respect of workers in the expanded public works programme will be increased proportionately to any adjustment of the national minimum wage.

How is the national minimum wage calculated?

The calculation of the national minimum wage is the amount payable in money for ordinary hours of work. It excludes:

  • any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance, unless specified otherwise in a sectoral determination;
  • any payment in kind including board or accommodation, unless specified otherwise in a sectoral determination;
  • gratuities including bonuses, tips or gifts; and
  • any other prescribed category of payment.

‘Ordinary hours of work’ means the hours of work permitted in terms of section 9 of the Basic Conditions of Employment Act 75 of 1997 (BCEA) (currently 45 hours per week) or in terms of any agreement in terms of section 11 or 12 of the BCEA. worker is entitled to receive the national minimum wage for the number of hours that the worker works on any day. An employee or worker who works for less than four hours on any day must be paid for four hours on that day.

This is applicable to employees or workers who earn less than the earnings threshold set by the Minister over time, presently being R205,433.30. If the worker is paid on a basis other than the number of hours worked, the worker may not be paid less than the national minimum wage for the ordinary hours of work.

Any deduction made from the remuneration of a worker must be in accordance with section 34 of the BCEA, provided that the deduction made in terms of section 34(1)(a) of the BCEA does not exceed one quarter of a worker’s remuneration.

Does a worker have a right to the national minimum wage?

Every worker will be entitled to payment of a wage not less than the national minimum wage. Employers will be obligated to pay workers this wage. The payment of the national minimum wage cannot be waived and overrides any contrary provision in a contract, collective agreement, sectoral determination or law.

Must a worker’s contract of employment be amended in light of the NMWA?

The national minimum wage must constitute a term of the worker’s contract, unless the contract, collective agreement or law provides for a more favourable wage. Employers should thus, where applicable, amend their contracts of employment to make reference to the national minimum wage. An employer should note further that a unilateral change of wages, hours of work or other conditions of employment in connection with the implementation of the national minimum wage will be regarded as an unfair labour practice.

When does the provisions of the NMWA come into effect?

The NMWA will came into operation on 1 January 2019. Section 4(6) of the NMWA, which prohibits the payment of the national minimum wage being waived and further provides that the national minimum wage takes precedence over any contrary provision in any contract, collective agreement, sectoral determination or law, operates with retrospective effect from 1 May 2017.

Can an employer be exempt from paying the national minimum wage?

An employer or employer’s organisation registered in terms of section 96 of the Labour Relations Act 66 of 1995 (LRA), or any other law, acting on behalf of a member, may apply for exemption from paying the national minimum wage. The exemption may not be granted for longer than one year and must specify the wage that the employer is required to pay workers. The exemption process provided for in the regulations to the NMWA must be complied with when doing so.

An employer or a registered employer’s organisation may assist its members to apply to the delegated authority, for an exemption from paying the national minimum wage.

The application must be lodged on the National Minimum Wage Exemption System.

An exemption may only be granted if the delegated authority is satisfied that the employer cannot afford to pay the minimum wage, and every representative trade union has been meaningfully consulted or if there is no such trade union, the affected workers have been meaningfully consulted. The consultation process requires the employer to provide the other parties with a copy of the exemption application to be lodged on the online system.

The determination of whether an employer can afford to pay the minimum wage must be in accordance with the Commercial, Household, or Non-Profit Organisations Financial Decision Process outlined in Schedule 1 of the Regulations to the NMWA.

The delegated authority may grant an exemption from paying the national minimum wage only from the date of the application for the exemption. The exemption must specify the period for which it is granted, which may not be more than 12 months.

The delegated authority must specify the wage that the employer is required to pay workers, which may not be less than 90% of the national minimum wage.

The delegated authority may grant an exemption on any condition that advances the purposes of the NMWA.

An employer exempted from paying the national minimum wage must display a copy of the exemption notice conspicuously at the workplace where it can be read by all employees to whom the exemption applies. Further, a copy of the exemption notice must be given to the representative trade union, every worker who requests a copy, and the bargaining council.

Any affected person may apply to the delegated authority for the withdrawal of an exemption notice by lodging an application on the online system in the prescribed format. Before the delegated authority makes the decision to withdraw an exemption notice, the delegated authority must also be satisfied that the employer has been consulted, and the representative trade union or affected workers have been given access to the application lodged.

If an exemption notice is withdrawn, the delegated authority must issue a notice of withdrawal on the Exemption System.

What is the role and responsibility of the National Minimum Wage Commission?

A National Minimum Wage Commission is established by the NMWA. The Commission must review the national minimum wage annually and make recommendations to the Minister on any adjustment of the national minimum wage. The recommendations must consider: inflation, the cost of living and the need to retain the value of the minimum wage; wage levels and collective bargaining outcomes; gross domestic product; productivity; ability of employers to carry on their businesses successfully; the operation of small, medium or micro-enterprises and new enterprises; the likely impact of the recommended adjustment on employment or the creation of employment; and any other relevant factor.

Jacques van Wyk is director and labour law specialist at Werksmans Attorneys.

Source: Fin24; The Citizen

The National Minimum Wage Bill submitted before the National Assembly on Tuesday is a historic achievement – a direct response to the call made in the 1955 Freedom Charter, and a first since the dawn of South Africa’s, Labour Minister Mildred Oliphant said on Tuesday.

The National Minimum Wage Bill, which sets minimum wages at R3 500 a month or R20 an hour, was passed with 202 votes from mostly ANC benches. The other two Bills, the Basic Conditions of Employment Amendment Bill and Labour Relations Amendment Bill also passed with the same number of votes.

All three Bills have been severely criticised by opposition parties, as well as Saftu.

All three bills were passed by the National Assembly and will be sent to the National Council of Provinces for concurrence.

“Every journey starts often with a small step. The journey to address the plight of the lowest paid workers reached a milestone,” she said. Oliphant added that even though the bills seemed “mild”, they are “groundbreaking” in character.

Referring to the “robust engagement” between social partners throughout the formulation of the bills, Oliphant said it is a reminder that democracy is alive and real in South Africa.

“We must recognise that we may not agree all the time, it is normal to disagree at times.”

The national minimum wage seeks to improve the lives of the lowest paid workers in the labour market and will address the inequality challenge in South Africa and by extension poverty, Oliphant explained.

A national minimum wage commission will also be established to take over the functions of the Employment Equity Commission. The commission will review the national minimum wage, currently at R20 per hour, annually.

Oliphant added that the Basic Conditions of Employment Amendment Billl has proposed amendments as a consequence of the National Minimum Wage Bill.

It is designed to reinforce and create an “enabling legal environment” for the national minimum wage. It also redefines the role of the Council for Conciliation Mediation and Arbitration on matters which may arise as a result of the implementation of the minimum wage.

The Labour Relations Amendment Bill in turn will give effect to a code of good practice on strengthening collective bargaining, preventing violent and prolonged strikes.

The bulk purpose of the amendments is purely administrative – preventing employers from side-stepping new legislation without following due processes, she explained.

“For far too long millions of South Africans [have sat] on the margins of economic and social progress,” said Oliphant.

The disconnect between those at the top and those at the bottom must be addressed, and the wealth creators and disadvantaged in society should be brought together.

African National Congress MP and chairperson of the portfolio committee on labour Sharome Van Schalkwyk hit back at claims that the committee rushed the process of considering the amendments.

She added that the R20 per hour rate is a starting point, increasing the income of more than six million South Africans. The benefit of this move will have a wider reach as these workers often have to support their families.

She also criticised the call by the South African Federation of Trade Unions (Saftu) for a minimum wage of R12 500, calling it a “massive shock” to the economy.

“We must be realistic and not reckless in the process,” said Van Schalkwyk.

Democratic Alliance MP Michael Bagraim criticised the “undue and desperate haste” with which the bills ran through the portfolio committee.

He also raised concerns over the job losses that would follow. He noted that Saftu did not have a fair opportunity to make its submissions in the consultation processes.

Economic Freedom Fighters MP Thembinkosi Rawula also shared views that government should not exclude Saftu from making submissions.

Saftu is also against the national minimum wage of R20 per hour. It previously held marches across various cities in the country in a national strike in April, demanding a living wage.

The Congress of South African Trade Unions (Costau) meanwhile issued a statement on Tuesday welcoming the finalisation of the bills. It has called for Parliament to adopt them speedily so that the president can sign them into law.

Cosatu has said that even though a minimum wage is not a living wage, a living wage cannot be legislated. “In fact no country has legislated a living wage.

“That is something that unions and workers must campaign for. That is something that government must work towards. That is something that business must be compelled to do,” parliamentary coordinator Matthew Parks said.

Cosatu also hit out at Saftu for slamming the Labour Relations Amendment Bill. Saftu believes the bill will make it impossible for trade unions to organise protected strikes, even after attempts for a negotiated settlement reach deadlock, the federation claimed.

Cosatu said the bill does not collapse the right to strike.

Uniting labour

Saftu acting spokesperson Patrick Craven told Fin24 that it is unfortunate that Cosatu supports the labour bills, but the federation has requested to meet up with Cosatu to discuss issues of “common interest”.

These comprise poverty, inequality, unemployment, privatisation and the VAT hike. Saftu has not yet had a response from Cosatu on the matter.

Cosatu spokesperson Sizwe Pamla said that the congress is aware of the request and plans to meet with Saftu within the next two weeks, once secretary general Bheki Ntshalintshali is back in the country.

“We want to explore a situation to unite workers when it comes to policy questions.” He said it is important to look at what unites workers, rather than the issues that divide them.

By Ben Roberts, Prof Sharlene Swartz and Dr Adam Cooper for the HSRC

The current recommendation for a minimum wage of R3 500 for South Africans is far too little. It should be at least twice that. In addition, we should also legally cap the income of company executives.

This is according to the majority of people who participated in the HSRC’s most recent social attitudes survey. They responded to questions related to a minimum wage and whether there should be a limit to what company heads could earn. These questions were included as part of the HSRC’s ongoing work into issues of poverty, inequality and restitution.

Income inequality has grown in post-apartheid South Africa, as the democratic period has brought with it greater disparities in earnings between a small, increasingly deracialised affluent group and the poor Black majority. This has been shown by Prof Murray Leibbrandt and his colleagues at the Poverty and Inequality Initiative at the University of Cape Town who describe a shift in the Gini-coefficient, a measure of income inequality, from 0.6 in 1993 to 0.7 in 2008. According to Leibbrandt and colleagues, wage income is responsible for 85% of income inequality with the labour market playing the defining role in ongoing income differences.

To test how the South African public feels about these differences in wage earnings, questions on the topic were included in the 2017 edition of the annual South African Social Attitudes Survey (SASAS). SASAS is a nationally representative sample survey of adults aged 16 and older that investigates public opinion in the country. The long-term aim of this survey programme is to construct an empirical evidence base that will enable analysts to track and explain the attitudes, values, beliefs and behaviour patterns of the country’s diverse populations by age, sex, population group, educational attainment, province, geographic subtype and class.

The survey questions explored South Africans’ perceptions regarding appropriate legislative interventions in labour market rewards aimed at both the top and bottom end of the income continuum. Specifically, the questions probed what respondents thought were appropriate minimum wages for workers and whether remuneration of corporate executives should be restricted. The participants were asked:

“What do you think is a fair minimum amount that all South African workers should earn each month? (No worker should earn less than this a month).

and

“To what extent do you agree or disagree that a law should be introduced in South Africa that limits the amount that a person in charge of a large national company can earn?”.

Minimum wage is too low
Results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill. Differences between sub-populations within the sample were noteworthy, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Top-end wages should be capped
Opinions about executive pay were recorded on a five-point scale (ranging from ‘strongly agree’ that a law should be introduced to limit earnings to ‘strongly disagree’). In total, 53% of the participants agreed that executive pay should be limited, 15% disagreed, 22% remained neutral and 11% were uncertain of the appropriate course of action or did not answer the question. Interesting differences between attitudes of sub-groups also emerged from this question, as Black Africans displayed greater support for limiting executive pay, in comparison to White and Indian adults. More unemployed people favoured income restrictions than employed respondents, as did young people in comparison to those over 50 years old.

Results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill. Differences between sub-populations within the sample were noteworthy, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Opinions about executive pay were recorded on a five-point scale (ranging from ‘strongly agree’ that a law should be introduced to limit earnings to ‘strongly disagree’). In total, 53% of the participants agreed that executive pay should be limited, 15% disagreed, 22% remained neutral and 11% were uncertain of the appropriate course of action or did not answer the question. Interesting differences between attitudes of sub-groups also emerged from this question, as Black Africans displayed greater support for limiting executive pay, in comparison to White and Indian adults. More unemployed people favoured income restrictions than employed respondents, as did young people in comparison to those over 50 years old.

Source: Business Tech

The results resonate with data from elsewhere in the world – for example in the US, between half and three-fifths of Americans concur with this kind of regulatory policy. Populations in the highly unequal societies of South Africa and the US therefore agree that measures to restrict corporate salaries should be introduced.

The survey results indicate that the public is astutely aware of existing wage disparities and favours courses of action to reduce these differentials. This was true both at the top end, in terms of executive pay, and for attitudes towards those most vulnerable in our society, people who receive very low wages. At the very least, the minimum wage should be closer to R40 per hour according to the South African public. Importantly, these findings were consistent across the class spectrum, suggesting that a broad consensus exists in relation to this issue, one that can only function to bolster the South African democracy.

 

By Tehillah Niselow for Fin24 

Thousands of workers are expected to take to the streets on Wednesday for a one day strike as the South African Federation of Trade Unions (Saftu) plans to make the country “ungovernable”.

The federation marched to parliament on April 12 and handed over a memorandum of demands but they say that the response did not address their concerns and workers will embark on nationwide action to put pressure on members of parliament to reject several labour bills making their way through parliament.

Saftu, led by dynamic general secretary Zwelinzima Vavi, was formed exactly one year ago.

Fin24 took a closer look at their plans for the general strike.

When: Wednesday 25 April 2018

How: Section 77 of the Labour Relations Act (LRA) allows workers to undertake protected strike action to promote their social and economic interests. Saftu’s application to the Section 77 Sub-Committee of the National Economic Development and Labour Council (Nedlac) was unsuccessful but three trade unions affiliated to Saftu; NUPSAW, ICTU and Salipswu made a similar Section 77 application to Nedlac and it was granted.

On Wednesday, all employees, regardless of whether they are Saftu members or non-unionised may join the strike under the ‘no work, no pay principle’.

Who: According to unaudited figures, Saftu has 800 000 members. The largest affiliate is the biggest trade union in SA, the National Union of Metalworkers (Numsa) with approximately 300 000 members, mostly in the manufacturing sector.

“We want everyone to join, in particular appealing to rank and file members [of other unions], many of them will be disgusted that their leaders voted for the [labour law] changes, without a mandate”, Saftu spokesperson Patrick Craven told Fin24.

Where: Saftu is expected to announce the nationwide routes at a press conference on Monday.

Why Saftu is taking to the streets

1. Labour law amendments

Parliament is currently considering amendments to the Labour Relations Act‚ the Basic Conditions of Employment Act‚ and the new National Minimum Wage Bill.

“Various amendments to labour laws will make it incredibly difficult to strike, it’s already quite difficult,” Craven said.

He said that the new labour bill making its way through parliament will include more rigorous requirements for pre-strike balloting and that this will be difficult for smaller unions with limited funds.

Craven added that the proposed amendments to the LRA will also allow for the Commission for Conciliation, Mediation and Arbitration (CCMA) to intervene in strikes deemed to be lengthy and/or violent.

2. Minimum wage

Saftu objects to the R20 an hour minimum wage agreement, which was set to be implemented on 1 May but has since been postponed due to lengthy parliamentary processes.

“We want a living wage, we haven’t set a specific figure [but] we were very impressed with Marikana Lonmin workers who wanted R12 500. R20 is an insult to their memory,” Craven said.

The Parliamentary portfolio committee on labour said on Friday it will refer the National Minimum Wage Bill back to the labour department to be redrafted so that it includes public input received by the committee.

3. Nedlac membership

Craven said that the nationwide marches on Wednesday “are linked to the campaign to be recognised by Nedlac”.

Saftu remains in the cold, outside of Nedlac, the forum which negotiated the minimum wage and the labour law amendments between the three other union federations, government, business and the community sector.

Requirements for Nedlac membership include audited membership figures and financial statements.

Saftu maintains it does not have these yet as the federation was only formed a year ago and the admissions procedures at Nedlac are too onerous.

Who will not be part of the general strike?

Cosatu – the Congress of South African Trade Unions spokesperson Sizwe Pamla said that while they agree with Saftu that the R20 per hour minimum wage is inadequate, it’s a starting point to improve workers’ lives and the figure is what the “South African economy could give us”.

Pamla added that the amendments to the LRA do not represent a dramatic change to the labour landscape as they were already provided for in the legislation, they just weren’t enforced.

At loggerheads since the formation of Saftu in April 2017, Pamla said that they have good working relations with the two other federations at Nedlac, Fedusa and Nactu and need to work with Saftu in the future.

Nactu – the National Council of Trade Unions general secretary Narius Moloto said that the federation believed that the minimum wage is “historic” as it will benefit 40% of workers, currently earning below R20 per hour.

With regard to amendments to the labour law, Moloto said they will not make embarking on strike action more difficult; “we don’t really understand what they’re protesting about”.

Fedusa (the Federation of Unions of South Africa) general secretary Dennis George said that the organisation won’t be joining the strike as the minimum wage was negotiated with government. He added that 4,5-million workers will be covered by the R20 per hour salary and this will be “a huge benefit to the country”.

Deputy President Cyril Ramaphosa signed the R20 per hour minimum wage agreement between labour, business and government on Tuesday.

That is according to Dennis George, general secretary of the Federation of Unions of South Africa (Fedusa) on Wednesday.

Ramaphosa’s spokesperson Ronnie Mamoepa declined to confirm the signing late last night.

“Deputy President Cyril Ramaphosa will provide details on the status of discussions of (National Economic Development and Labour Council) Nedlac committee of principals on labour relations and wage inequality tomorrow (Wednesday),” he told Fin24.

The signing was supposed to have taken place at Tuesday’s InvestSA lunch that President Jacob Zuma hosted in Cape Town ahead of his State of the Nation address (Sona) on Thursday.

However, the Presidency announced on Tuesday that it was postponing the signing due to Cosatu’s request to delay the agreement until its central executive committee (CEC) could review the new proposal.

However, George said Cosatu was not able to stop the signing. “Our friends from Cosatu think they can stop the process,” he said. “Cosatu said they were in agreement and that all they want to do is speak to their CEC. They must tell us when they are ready to sign.”

“This agreement kicks in from May 2018,” he said. “After this, we need to draft legislation and that must go through a public consultation process.

“There were concerns around the R20 per hour salary as employers could try reduce hours,” he said. “But we will put in a law that workers cannot be worse off.”

He said Zuma will spell out the details of the agreement in his Sona.

Signing the agreement on Tuesday were (left to right) National Council of Trade Unions President Joseph Maqhekeni, Fedusa president Godfrey Selematsela, Deputy President Cyril Ramaphosa and Labour Minister Mildred Oliphant.

The deal follows Ramaphosa’s proposal of a R3 500 national minimum wage. He has been heading up the negotiations with Nedlac.

He explained that the panel considered the low level of growth in the South African economy, but also looked at South Africa’s peers, such as Brazil, Turkey and Mexico and how a minimum wage has affected them.

Ramaphosa argued that a minimum wage will be a radical shift to address wage inequality. About 47% of South Africans earn below R3 500, while 51% live on less than R1 600 per month, he said at the time.

However, there has been widespread criticism of a minimum wage of R3 500, with political parties and labour unions referring to it as “slave wages” and “poverty wages”. They are demanding a “living wage” for workers.

The Congress of South African Trade Unions (Cosatu) said on Tuesday the African National Congress failed to implement its policy to radically transform the economy. “It is ridiculous,” said spokesperson Sizwe Pamla.

“We made it very clear that the minimum wage is not just about having a wage,” he told Fin24. “It’s about having one that makes a difference to South African lives.”

The National Union of Metalworkers of South Africa (Numsa) said paying workers R20 per hour is an insult.

Numsa general secretary Irvin Jim also climbed into Ramaphosa, claiming that he has proven to be “hostile” to workers.

“Ramaphosa, the billionaire and ultra-capitalist, values his precious buffalo more than the lives of human beings.”

By Matthew le Cordeur for Fin24

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