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2 Aug 2019

National Minimum Wage Commission

The first meeting of the newly assembled National Minimum Wage Commission (NMWC) was on Thursday 26 February 2019.  The NMWC consists of the same grouping of social partners as Nedlac, namely organised labour, organised business and community organisations.  In addition, three academic experts who were appointed by the Minister of Labour, also serve on the NMWC.   Agri SA is represented on the NMWC by virtue of our membership of Business Unity South Africa (BUSA).

The tasks of the NMWC are clearly set out in section 11 of the National Minimum Wage Act.  These are:

  • Review of the national minimum wage and recommendation of adjustments; and
  • Investigate and report annually to the Minister on the impact of the national minimum wage on the economy, collective bargaining and the reduction in income differentials and make such information available to the public; and
  • Investigate income differentials and recommend benchmarks for proportionate income differentials; and
  • Set medium term targets for the national minimum wage within three years of the commencement of this Act; and
  • Advise the Minister on measures to reduce income differentials or any other matter on which the Minister requests the Commission’s advice; and
  • Advise the Minister on sectoral determinations; and
  • Advise the Minister on any matter concerning basic conditions of employment; and
  • Perform any such function as may be required of the Commission in terms of any other employment law.

These tasks are a mouthful, and a mountain to tame, however the intention is to manage the NMW from a carefully considered and research-based point of view.  It is not the intention of any of the crafters of this piece of legislation that it should cause disruption to the labour market, or even worse, job losses.  Furthermore, the first NMWC meeting set a tone of mutual respect between parties that we trust will be the overriding theme within the commission.

Agriculture’s special dispensation of 90% of the NMW will be handled in a similar way:  No adjustments will be made in a way that will unduly pressurise the sector into a state of job losses, and no adjustment of the NMW in general is being planned before the first anniversary of the NMW on 1 January 2020.

Where employers have workers, who are paid above the threshold of the NMW in the agricultural sector, many employers have already indicated that they have paid such workers inflationary increases from 1 January 2019, as the sectoral determination increase date of 1 March of each year, will no longer be utilised.

It seems that after the initial confusion of the exact way in which the sectoral determination and the NMW Act should be interpreted together, employers have worked through the new set of administrative measures caused by the NMW Act.  Agri SA remains committed to sharing up-to-date information and answering all of your burning questions to the best of our ability.  Please feel free to forward questions to jahni@agrisa.co.za.