All Nedlac parties, except Cosatu, have signed the national minimum wage agreement (NMW) on Tuesday, 7 February.
Minimum wages are set at R20 per hour and will take effect from 1 May next year.
All sectoral determinations, collective bargaining agreements and individual employment contracts are to be aligned with the NMW.
Agriculture and Forestry minimum wages are to be set at 90 percent (R18/hour) on implementation date.
A code of good practice for collective bargaining, industrial action and picketing, as well as an accord on collective bargaining and industrial action will accompany the agreement.
Employers can apply to the Department of Labour for an exemption.
Such exemptions will only be granted if financial hardship can be substantiated and will only be granted for a maximum of 12 months.
A commission will be established to review minimum wage adjustments every year.
Due process
Before the NMW Bill can become law, it has to be drafted and gazetted through the Parliamentary approval process, go through a public engagement process and will be subjected to a Socio-
Economic Impact Assessment.
There are a number of issues on which the forestry industry requires clarity.
These are that the minimum wage contained in the current Forestry Sectoral Determination is based on the industry norm of a 45-hour working week and not a 40-hour working week as provided for in the NMW agreement.
The new minimum wage for forestry workers under the current Forestry Sectoral Determination will be increased by 8% to R3 001.13 per month or R15.39 per hour with effect from 1 March 2018.
By 1 May this will increase to R18 per hour which represents an increase of R2.61 or 17%.
If looked at from a monthly perspective, and based on a 45-hour week, the monthly wage could increase from R3001.13 to R3870, an increase of R868.87 per month or 29.0%.
Theoretically, in terms of the current Forestry Sectoral Determination, a new minimum wage, based on CPI+1% will become effective on 1 March next year.
The question needing to be answered is what would the minimum wage be for the two month gap between 1 March and 1 May 2018?
Detail to be determined
The NMW is subject to annual adjustment and the cost of living and minimum living levels, the alleviation of poverty, wage differentials and inequality, conditions of employment, health, safety and welfare of workers, employment levels, inflation, GDP growth, productivity and collective bargaining all need to be factored in.
It is therefore important that employers consider making representations to the NMW Commission on an annual basis regarding any proposed adjustments to the NMW.
Small, Medium and Micro Enterprises (SMMEs) and start-up business are not exempt from the implementation of the NMW, but will be able to apply for an exemption under certain circumstances.
When the NMW is introduced, domestic workers will be paid 75% of the NMW and agricultural workers will be paid 90% of the NMW.
It is envisaged that these sectors will be brought up to 100% within two years, pending research by the NMW Commission.
The public will be given an opportunity to comment on the Bill once Gazetted.
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