The Federation of Unions of South Africa (FEDUSA) has welcomed the passing of the National Minimum Wage by an overwhelming majority of political parties in Parliament on Tuesday.
Alongside with COSATU, NACTU; FEDUSA fought hard for minimum floor of wages under which no South African worker should be paid. FEDUSA and the sister federations wanted a minimum wage of R26 an hour but after difficult negotiations with business and government at NEDLAC, settled for R20 an hour, which would an equivalent of R3 500 a month for a 40 hour-week.
FEDUSA is keenly aware that the minimum wage is not a living wage but will lift more than 6.4 million workers or about 47% of the South Africa’s total workforce who earn below this amount out of abject poverty. In South Africa wages are regulated by the tripartite Employment Conditions Commission using the Basic Conditions of Employment Act (BCEA) as its key policy instrument to prescribe permissible wage levels and statutory deductions.
The BCEA allows employers to set wages at hourly, weekly and monthly rates. A living wage is much higher than the national minimum wage of R20 an hour or R3 500 a month for a 40-hour week or eight hours a day. Employment Conditions Commission will be collapsed into a new tripartite structure to be known as the National Minimum Wage Commission once the new National Minimum Wage Act has been signed by President Cyril Ramaphosa and a minimum wage formally introduced in South Africa.
Versions of the NMW previously known as sectoral determinations that are announced by the Minister of Labour every year for farm and domestic workers – currently standing at around R8 an hour – will be increased by more than 10% and collapsed into 90% and 80% respectively of the new national floor of R20 an hour wages. Minimum wages for these vulnerable sectors will be gradually increased to the level of the NMW, itself to be reviewed two years following the date of its introduction in South After and to be adjusted regularly thereafter in line with food and transport inflation for workers.