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'No guarantees' minimum wage deadline will be met

Nov 28 2017 08:10
Tehillah Niselow

Johannesburg - The Department of Labour cautioned workers and trade unions on its recent national minimum wage roadshows that there are "no guarantees” the May 1, 2018 implementation deadline will be met.

Labour Relations chief director Thembinkosi Mkalipi told Fin24 that the Department of Labour had submitted the Minimum Wage Bill to Parliament in mid-November using Joint Rule 195. It’s now up to the two labour committees in the National Assembly and the National Council of Provinces (NCOP) to process the bill.   

“I’m hopeful, but it’s quite tough," Mkalipi said. "The (parliamentary) programme is not controlled by us."

Section 195 of the joint rules of parliament and Section 159 of the National Assembly rules makes provision for a "joint legislative process" to fast track the legislative and public consultation processes before a bill is enacted.

Congress of South African Trade Unions (Cosatu) Parliamentary officer Matthew Parks said this will be the first time since democracy that this provision will be used.

“Bills usually take a year to process on average," Parks cautioned. "The first of May, is extremely tight, to be polite.”

Cabinet approved the National Minimum Wage Bill on November 1, following an agreement by government, business, labour and community representatives at the National Economic Development and Labour Council (Nedlac) in February.  

The bill will introduce a R20 per hour mandatory minimum wage, subject to exceptions for farmworkers, domestic workers and learnerships.

Also known as an "ordinary bill", it does not affect the provinces, but requires the NCOP’s consideration. A joint process will therefore remove some of the bureaucracy, if both the National Assembly and the NCOP agree to this.

Parliament goes into recess on December 15 and it also has another scheduled break during the Easter period, leaving approximately four months for the entire legislative process to be completed and the president to sign it into law, before the May 1 deadline.

At the same time, Mkalipi said the minimum wage procedure shouldn’t be too rushed, otherwise the act could face a legal challenge from unhappy employers or employees who claim the public consultation phase didn’t follow due process.

“We want buy-in as much as possible, we don’t want to make this a farce”, Mkalipi added.

Areas of disagreement

Complicating matters are the few remaining areas of disagreement between labour, government and business, which are expected to be resolved through the parliamentary process.

“The Expanded Public Works Programme (EPWP) is one of the big bones of contention,” Parks said.

Cabinet approved an R11 per hour minimum wage for people who are part of the EPWP, because government - which is already cash strapped - maintains the positions are learnerships to teach people skills and improve their employment prospects.

Cosatu believes EPWP workers replace permanent positions in municipalities, as they are cheaper to fill and they should be paid the R20 per hour minimum wage, like other employees.

Value for money

There’s already some concern that the R20 per hour minimum wage, agreed to in February, will be less effective in combating poverty, given the difficult economic times the country is experiencing.

Dr Gilad Isaacs, coordinator at the National Minimum Wage Research Initiative at Wits University, told Fin24 that the rand’s volatility will have an impact on its buying power in May, as inflation is significantly impacted by the exchange rate.

“The value of the rand has fallen recently," said Isaacs. "This will have an inflationary impact on South Africa, (raising costs) on petrol and imported goods, which means the R20 per hour will be worth less than we’d expected.”

Isaacs added that, on the positive side, the inflation forecast for 2018 in the October Medium Term Budget Speech was 5.2%, down from the 5.7% prediction in the February Budget Speech.

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