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Deal or no deal?

Feb 12 2017 06:09
Dewald van Rensburg

Labour federation Cosatu still wants a national minimum wage (NMW) that is fundamentally different from the deal hurriedly signed this week by all the other stakeholders – made up of labour, business, government and civil society – that were part of the torturous two-year negotiations.

For the record: Labour’s lead negotiator responds to this article

It did not pull out for purely procedural reasons, as both the presidency and Business Unity South Africa have suggested this week. Instead, City Press understands that Cosatu is deeply opposed to a handful of powerful caveats apparently inserted at the very last minute as the final draft got hammered out in the union buildings on Thursday night.” 

“I do not see Cosatu’s central executive committee walking away from it, but there are specific issues,” Cosatu negotiator Neil Coleman told City Press.

“The basic architecture is not in question; it may be about tweaking.”

However, the parts of the minimum wage deal which Cosatu objects to have to do with fundamental points.

The agreement was meant to pave the way for a quick and uncontested drafting of a NMW Act. This now seems unlikely.

At the heart of the matter is not the starting wage of R20 an hour, but how the wage will be increased.

Cosatu demanded that a firm medium-term target be set, which would have dictated increases over the coming years to reach the widely accepted household poverty line of about R4 500 a month.

Instead, this week’s deal is more vague in that it calls for a target to be formulated at a later date.

More importantly, Cosatu interprets two key clauses to mean almost the exact opposite of what other parties say they mean.

No guaranteed increases

The clause on reviewing the NMW annually apparently leaves the door wide open for a zero increase, if a yet-to-be established NMW commission decides this.

A late draft of the agreement, seen by City Press, gave business and labour the right to veto the commission’s decisions, but this was removed from the final version.

The contested paragraph reads: “It is specifically agreed that the adjustment should not lead to the erosion of the value of the NMW.”

But this is followed directly by the contradictory phrase, “taking into account all of the above factors” – referring to a massive list of economic variables.

Practically, the commission will have broad discretion to increase – or not to increase – the NMW every year, said Tanya Cohen, CEO of Busa.

“It is leaving open the possibility of no increases,” echoed Imraan Valodia, head of the expert panel which designed the NMW proposal last year.

However, Valodia added that an explicit target would have been a bad idea. “You are seeing a lot of hype about the number of jobs that are going to be lost ... Our sense is that that hype is overstated.

“But suppose there is a blood bath in one particular sector. You want to give the commission the scope to say, ‘We want to change the tiering in this sector,’ or something to that effect.”

Coleman said this contradictory wording “came in at the end” of the talks.

“We disagree with that wording. It is meaningless. If you cannot erode the value, then what does that mean? It is confusing,” he said.

Cosatu’s view is that the annual increase must at the very least be equal to inflation every year.

“The progressive increase is crucial,” said Coleman.

Casuals or acts of God?

Cosatu has another major beef with the agreement.

The expert panel last year proposed a “minimum hours” rule, whereby the minimum daily payment to a worker should be equal to four hours’ wages.

In this week’s agreement, however, it is watered down to apply only when “acts of God” cut short a working day.

This is a fundamentally different from the rule the panel and Cosatu wanted, argued Coleman.

“It is about casualisation,” he said.

Cosatu wants a guaranteed minimum of six hours a day, amounting to R120, as the least anyone can be paid for coming to work – irrespective of the hours dictated by the employer.

Valodia admitted that the panel’s proposal was more universal, saying it probably had little practical importance. “People working less than four hours a day would generally fall above the NMW.”

Dennis George, the general secretary of rival labour federation Fedusa, said what Cosatu does made no practical difference.

“[When Cosatu pulled out] we said, ‘No, it does not work that way’, so we signed the agreement. There will be no more negotiations,” he said.

According to George, very few Fedusa members earn less than the NMW anyway.

“Only security guards are possibly affected [among Fedusa union members] and for them R3 500 is a good deal,” he told City Press.

  • This article was amended on February 13 2017. The original article suggested that Cosatu explicitly said that it felt swindled by the deal, which it never did. City Press apologises for the inconvenience caused by the error, which was introduced during the editing process.

cosatu  |  business unity sa  |  minimum wage


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