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National minimum wage bill signing imminent, says presidency

| Economic factors

The signing into law of the national minimum wage bill, which was passed by the National Council of Provinces in August 2018, is “imminent”, says presidency spokesperson Khusela Diko.

Organised labour has been frustrated by delays encountered since the agreement to introduce the R20-per-hour minimum wage rate was signed in February 2017. The targeted implementation date of May 1 failed to materialise, leading Cosatu to warn that the minimum wage rate was depreciating in value while President Cyril Ramaphosa delayed signing it into law.

The national minimum wage bill is part of a package that includes amendments to the Basic Conditions of Employment Act and Labour Relations Act.

Since the bills were published in November 2017, there have been countless fuel hikes and a VAT increase to 15% from 14%, which came to effect on April 1.

On Monday, Diko told Business Day the three labour bills sent to Ramaphosa on August 30 would be signed soon. 

Diko added that the delay was caused by the president’s insistence that their legal counsel study “all processes undertaken” before the bills are sent to his office from parliament.

“The president has introduced a system where he wants our legal counsel to study all the processes undertaken before the bills are taken to him,” she said.

Ramaphosa’s cautious approach could be due to concerns raised by academics and researchers about some of the provisions in the minimum wage bill following the drafting process by the department of labour.

The postponement on May 1 was also meant to allow more time for legislators to process the bills, with additional time allocated following complaints from political parties and labour unions that the bills were being rushed through parliament.

The bills were also returned to the department of labour as they contained errors that in some cases would have rendered the minimum wage ineffective to millions in the targeted group of about 47% of the workforce eligible for the rate increase.

This amounts to 4.3-million low-wage workers. Cosatu parliamentary co-ordinator Matthew Parks said they were concerned that the delays had decreased the value of the R20 agreed on by social partners at the National Economic Development and Labour Council (Nedlac) after years of painstaking and difficult negotiations.

“It’s worse if you look at electricity tariff hikes, petrol hikes.… The minimum wage was going to benefit 47% of the workforce — if you take time to implement it, the impact becomes less,” he said.

According to the draft legislation, the minimum wage rate should be reviewed annually, starting in 2019. Cosatu said it would push for the increase in 2019, despite the changes in the planned timeline. Sources close to the process said if the president signs the bills into law during November, as planned, the implementation date would likely be scheduled for January 2019 to allow employers to adjust to the rates.

Its implementation is expected to be a major campaigning tool for the ANC among workers during the electioneering period ahead of the 2019 elections.

Meanwhile, social partners at Nedlac are selecting individuals to serve on the national minimum wage commission comprising three members from labour, business and community, an independent chairperson as well as three experts. The commission will review the national minimum wage annually and make recommendations on its adjustment while investigating its impact on the economy.

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