29 November, 2018
Ramaphosa caves to political pressure in signing new minimum wage bill
|Employers have to be given 30 days' notice before a new wage regime is introduced. Picture: ALAISTER RUSSELL
Cosatu wanted the bills signed without delay to ensure that employers are given
the required 30 days to adjust to the new system that kicks in on January 1
President Cyril Ramaphosa caved to
political pressure from labour federation Cosatu on Friday when he signed four
labour bills, including the National Minimum Wage Bill.
The minimum wage bill is expected to
benefit about 6-million workers who earn less than R3,700 a month, while
one of the other pieces of legislation, the Labour Relations Amendment
Bill, makes way for the establishment of an advisory arbitration panel to deal
with long and violent strikes in the interest of labour stability.
Business Day understands that the
presidency was planning to enact the bills at a signing ceremony in Kliptown
later in November, but only after the contentious process under way to
appoint the national minimum wage commission had been completed.
However, Cosatu wanted the bills
signed without delay to ensure that employers are given the required 30 days to
adjust to the new wage system before it comes into effect on January 1 2019,
failing which the system would have been postponed for an even longer period.
Employers have to be given 30 days'
notice before a new wage regime is introduced.
Organised labour has also argued that
the delays have led to a depreciation of the value of the R20 hourly rate,
which was determined in February 2017.
Cosatu, which is in an alliance with
the ANC, backed Ramaphosa's presidency bid and has resolved to support his
return to the Union Buildings in 2019.
The minimum wage was meant to come
into effect in May but due to issues that arose when the legislation was
drafted, it had to be postponed.
Another hurdle for Ramaphosa was
deadlock over ideal candidates to serve on the minimum wage
The commission will be responsible
for the annual review of the national minimum wage with an aim to alleviate
poverty and reduce wage inequality by considering inflation, GDP and
productivity, among relevant factors.
Each constituency at
the National Economic Development and Labour Council (Nedlac) got the
opportunity to nominate three representatives for the commission. The labour
minister, after consulting Nedlac partners, will appoint its chair and three
Sources at Nedlac said that the
business constituency was against the government's proposal to appoint senior
economist at Trade & Industrial Policy Strategies Dr Neva Makgetla
and associate professor of sociology at Wits University Sarah Mosoetsa to the
Wits University dean of commerce, law
and management Prof Imraan Valodia has also been tipped to sit on the
commission. He chaired the minimum wage expert panel, which recommended
the R20 hourly rate.
Valodia told Business Day last week
that despite the delays, the implementation of the law would still benefit a
significantly large number of people. The delays also inadvertently provided
business with an extended adjustment period.
"A long adjustment process is a good
thing, making sure that those who benefit will not suffer from any of the
potential impacts. Any kind of reasonable business would have been making
"I am hopeful that policies like the
minimum wage will start to open up space for our society to debate and address
the growing levels of inequality," he said.
Meanwhile, the SA Federation of Trade
Unions (Saftu) has rejected the signing of the minimum wage bill.
In a statement on Friday, Saftu said
the majority of workers will not be celebrating the law as the R20 rate was
"far below what anyone should have to live on; it condemns millions of workers
and their families to government-sanctioned poverty".
Source: Business Day