This article was written by Lara Kerbelker, an Associate at Norton Rose Fulbright South Africa
There is currently no blanket minimum wage in South Africa.
In certain sectors, minimum standards are regulated by sectoral determinations. The sectoral determinations determine the minimum wages for certain occupational categories within that sector. Increases in the sectoral minimum wage are determined annually by the Minister of Labour after consideration of a report by the Employment Conditions Commission.
Minimum wages are prescribed in sectors which are considered vulnerable. The vulnerability of a sector may be due to a variety of factors such as low union representation or historically poor wage levels.
Sectors that currently have minimum wages determined by sectoral determinations include the following:
- Contract Cleaning Sector
- Civil Engineering Sector
- Clothing and Knitting Sector
- Private Security Sector
- Domestic Worker Sector
- Wholesale and Retail Sector
- Children in the Performance of Advertising, Artistic and Cultural Activities
- Taxi Sector
- Forestry Sector
- Farm Worker Sector
- Hospitality Sector
Apart from sectoral determinations, minimum wages may also be set by collective agreements negotiated in bargaining councils.
Bargaining councils are made up of one or more registered trade unions, and one or more registered employers’ organisations. Where the requisite majorities exist, the Minister must, on request of the bargaining council, extend the terms of the collective agreement to non-parties.
Other than as recorded above, wages are left to be determined contractually between employers and employees and their representatives.
The Basic Conditions of Employment Amendment Act 20 of 2013, which came into effect on 1 September 2014, allows the Minister to publish a sectoral determination which applies to all employers and employees who are not covered by any other sectoral determination. It is possible that this provision could be used to effectively create a national minimum wage.
Increasingly, there have been calls from trade unions for the implementation of a national minimum wage. Trade unions argue that a national minimum wage will reduce income inequality, protect low income employees from exploitation and stimulate the economy.
The counter argument is that a national minimum wage will lead to job losses and stifle employment, thereby inhibiting economic growth.
The Department of Labour has instituted an investigation into the viability of the implementation of a national minimum wage in South Africa, but there is no currently no finality on the issue.