Nedlac parties agree on hourly minimum wage

• The R20-per-hour pay takes effect in 2018

An agreement on the national minimum wage has been struck between parties at the National Economic Development and Labour Council (Nedlac).

The parties are said to have agreed on R20 per hour to take effect from May 2018. They also agreed on the establishment of a National Minimum Wage Commission (NMWC) to review the minimum wage every year.

Among the first assessments of the effect of the introduction of the minimum wage will be whether it had affected employment. Unemployment levels in the country reached 27% in the last quarter of 2016.

Incentives have been punted in a draft document on the agreement at Nedlac as a reprieve for sectors which are unable to cope with the national minimum wage.

“The social partners commit to make every effort to avoid job losses that may arise in the short term from the introduction of the new minimum wage, and further commit to grow employment in the medium to long term through inclusive growth,” the document says.

A signing ceremony is expected to be held in Cape Town on Tuesday and President Jacob Zuma is set to announce the minimum wage during his state of the nation address on Thursday. According to the Presidency, Zuma will witness the signing of the agreement on the minimum wage along with Deputy President Cyril Ramaphosa, who spearheaded the Nedlac process.

The agreement is also accompanied by a “code of good practice for collective bargaining, industrial action and picketing”, as well as an “accord on collective bargaining and industrial action”, which, it is

hoped, will mitigate lengthy and violent strikes. Labour and government declined to comment on the agreement.

According to a draft document dated February 7, government is set to get the ball rolling on drafting legislation to give effect to the national minimum wage agreement. All sectoral agreements, collective agreements, bargaining council agreements and individual contracts will have to be aligned with the minimum wage act, once it is implemented.

A NMWC will be set up, which will adjust the minimum wage annually based on a number of factors, including cost of living, the alleviation of poverty, wage differentials and inequality, conditions of employment, employment levels, the health and safety of workers, inflation, GDP growth, productivity and collective bargaining.

The stipulation for R20 per hour instead of a blanket R3,500 monthly minimum wage may result in a limitation on the number of hours employees may work per week. The advisory panel, according to the document, will assess the effect on job losses of setting minimum working hours at 4, 5 and 6 hours per day respectively.

No employer may alter the conditions of employment and hours of work due to the introduction of the national minimum wage as this may constitute unfair labour practice.