The Minimum Wage Bill and Amendments to Labour Legislation, What you should Know?

Following recent news that the National Assembly has passed the long awaited Minimum Wage Bill as well as the proposed amendments to the Labour Relations Act and the Basic Conditions of Employment Act, it is important to take note of what these amendments actually mean to you, the Employer:

While it was widely announced that these amendments would come into effect on the 1st of May 2018 after they were initially published for public comment in late 2017, there have been major debates surrounding the specifics of these changes which necessitated a delay.

With the new president getting involved and negotiating strongly for the finalization of these amendments, a major milestone has been reached as the Bills are now passed on for a final round of stakeholder comments before they are passed to the National Council of Provinces. Once this has happened and been finalized, all that would remain is for these proposed amendments to be promulgated into law.

While the more publicized Minimum Wage Bill has been stealing the spotlight, there are various other inclusions which will enact some much needed labour reform and we therefore elected to highlight the effect that each of the three Bills will have if they are passed in their current form.

The Minimum Wage Bill:

• The Minimum Wage Bill will set the national minimum wage at R 20.00 per hour worked, excluding other benefits. This means that, despite any other benefits which an employee may enjoy (Housing, Allowances, Travel Reimbursements etc.) that his/her basic wage must be no less than R 20.00 per hour.
• This will mean that an ordinary employee working 45 hours a week will be entitled to a salary of R 3 897.00 excluding any other benefits.
• The newly formed National Minimum Wage Commission will also review the proposed minimum wage within 18 months of implementation and must change the minimum wage within two years of implementation.
• While parties cannot agree to an exemption among themselves, the Act does allow for a procedure to apply for such an exemption subject to somewhat onerous consultation with unions and/or employees, however it seems unlikely that such exemptions will be granted without extremely good cause shown.
• For the time being, Domestic Workers and Farm workers are excluded and get a lower minimum wage, however this is likely only an interim measure and will be brought in line with the National Minimum Wage over a relatively short period.

While the Minimum Wage Bill has seen the most attention in the mainstream media, the nature of our current labour relations framework requires extensive amendments to existing laws in order to be able to function and these changes have been made in the Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill respectively. We will however highlight noteworthy proposed changes of note in these acts as they are quite relevant.

Basic Conditions of Employment Amendment Bill:

• Various additions and amendments were made to accommodate the new Minimum Wage Bill.
• Minimum daily working hours are being set, meaning that it would be illegal to pay an employee who works only two (2) hours a day any less than four (4) hours ordinary wage.
• The powers of both Labour Inspectors and CCMA Commissioners are greatly expanded in order to ensure compliance and enforcement.
• The CCMA’s jurisdiction is greatly extended to cover the enforcement of both Compliance Orders issued by the Department of Labour as well as the enforcement of the proposed Minimum Wage Act.
• Additionally the CCMA will gain the power to arbitrate disputes about contracts of employment which it had only limited powers to do in the past as well as the payment of remuneration which currently rests with the Labour Court exclusively.

Labour Relations Amendment Bill:

• Strikes will no longer be considered legal if no picketing rules have been agreed upon. In cases where Employer’s and Labour cannot agree on such picketing rules, the CCMA may issue such rules.
• Strikes may no longer occur until the union has conducted a ballot of its’ members as to whether or not they wish to embark on a strike.

While the above summary is for convenience sake, it is important to note that multiple changes have been introduced and employers are urged to assess the amendments and make the necessary provisions in terms of their Labour strategies before these amendments are enacted.