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January : Update on Developments Surrounding Adoption of a National Minimum Wage

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23 January, 2017

Update on Developments Surrounding Adoption of a National Minimum Wage

Please find attached for your information an interesting article that appeared in yesterday's Business Day concerning the above.  In brief, it appears as if the parties at Nedlac are very close to an agreement on:

  • A national minimum wage -probably R3500 per month (although the sectors covered by such still need to be negotiated)
  • Labour Relations matters:
    • Secret strike ballots
    • Code of good practice i.r.o. collective bargaining and behaviour during industrial action
    • The use of "advisory arbitration"

FSA will be making the necessary submission once the final negotiated proposals are Gazetted for public comment.

Aside from the issue of wages, the Labour Relations system has long been criticised for being too rigid and any introduction in the system to make it more flexible would be most welcome.

Members will be kept abreast of developments.

Roger Godsmark
Operations Director
Forestry South Africa


Business Day

Nedlac edges closer to deal on minimum wage

Business DAY 12 JANUARY 2017 - 06:06 AM LINDA ENSOR

 The Department of Labour’s Thembinkosi Mkalipi
Agreement stands: The Department of Labour's Thembinkosi Mkalipi sees no change to the R20 per hour wage recommended.

Deliberations at the National Economic Development and Labour Council (Nedlac) on a national minimum wage and measures to stabilise labour relations are far advanced and could be finalised ahead of President Jacob Zuma's state of the nation address on February 9.

This would allow him to announce the ground-breaking agreement as a major achievement of his administration when he reviews the year gone by and outlines the government's plans for the year ahead.

However, the legislative process of incorporating the agreement into law will take much longer as the draft bill would have to be submitted to the Cabinet, released for public comment, redrafted and undergo the parliamentary process of public hearings and debate.

Any movement towards reforming the legislative framework for labour relations will be critical in addressing some of the concerns of credit ratings agencies, which have flagged the rigidity of the system.

The parties to Nedlac were hoping to wrap up their negotiations on the national minimum wage and the labour relations system at meetings held on Wednesday and to be held again next week, said Department of Labour chief director of labour relations Thembinkosi Mkalipi.

He did not believe there would be any change to the national minimum wage of R20 per hour recommended by the panel set up by Deputy President Cyril Ramaphosa. However, many matters still needed to be finalised such as who would be covered by the minimum wage and how it would be reviewed.

"There is still a lot of discussion that we need to have around this," Mkalipi said.

There was also an "understanding" within Nedlac on the need for secret ballots ahead of a strike, he added. Secret ballots have been a hugely contentious issue and have been strongly opposed by trade unions

Business Unity SA representative in Nedlac Tanya Cohen said also under discussion was a very significant code of good practice on collective bargaining, industrial action and picketing, which she said went a very long way in giving guidance as to what was acceptable behaviour and what was not during industrial action.

This included the use of dangerous weapons during strike-related conduct.

A lot of discussion had also taken place around the issue of advisory arbitration with some details still needing to be thrashed out.

Advisory arbitration refers to the arbitration carried out under the auspices of the Commission for Conciliation, Mediation and Arbitration for parties to prolonged and violent strikes which offer little prospect of an agreement being reached.

The idea is that the arbitrator/ mediator would propose an advisory settlement which the employer and the trade unions could take back to their constituencies in a bid to get an agreement.

The advice could be accepted or rejected but the mechanism allowed for a third party to bring some rationality to a dispute, Cohen said.

"There is a substantial package and if it is adopted in the form it has been presented it will be extremely positive for the country," she said, acknowledging that there were still some "sticky bits" to work out.

However, "substantially there is significant agreement on the issues".

Thursday's meeting would be by a subcommittee of the committee of principals and would decide on the recommendations of the panel, Cohen said. Discussions would also take place on issues of labour relations stability - within task teams - which were at a very advanced stage.

"There is significant urgency and all social partners are trying very hard to finalise the issues," Cohen said.

She agreed that the legislative process enacting the changes would take time, but noted that Nedlac task teams had formulated legal texts to amend the Labour Relations Act to achieve greater stability.

"The draft legislation is substantially there," she said.

FSA / Business Day