By May 1 next year, the
contentious National
Minimum Wage Act –
accepted by all National
Economic Development
and Labour Council
(Nedlac) parties – will be in
effect. But there are fears
this could
lead to job
losses in the
logistics and
manufacturing
sectors,
particularly
for the small
to medium
enterprises.
Government
believes a
national
minimum
wage would
eliminate
the need for
strikes and
hopes to see around 6.6
million workers earn a
minimum wage of R3 500
per month (at R20 an hour
for 40 hours a week or
R3 900 per month for 45
hours a week).
But at least 4.8 million
of them are covered by
sectoral agreements –
determined by sector,
or through bargaining
councils led by unions and
employer associations –
which prescribe their own
basic minimums for at least
17 categories of workers,
including
transport
and logistics
workers.
Magretia
Brown-
Engelbrecht,
labour
relations
manager at the
Road Freight
Association
(RFA), told
FTW that the
negotiated
minimum
rates, under
the auspices
of the National Bargaining
Council for the Road
Freight and Logistics
Industry (NBCRFLI), had
set new rates for drivers of
companies who transported
goods for gain, for a threeyear
period, ending 28
February 2019. The next
rate increases are effective
March 1, 2017 and March 1,
2018 respectively.
These rates are only
applicable, by law, to
“operators who transport
goods for gain”. This
means operators who are
contracted to supply a
transport or distribution
service to a client. “The
big retailers who have
their own trucks and
drivers are excluded from
the provisions of the
NBCRFLI,” she said.
Brown-Engelbrecht
added that all transport
employers who fell under
the jurisdiction of the
NBCRFLI, were currently
obligated to comply with
the wage rate set by the
NBCRFLI. “Non-compliant
companies can be reported
to the bargaining council
if set wage rates are not
honoured,” she pointed out,
noting that complaints were
subject to an enforcement
process.
At a 9% and 8.5%
increase for 2017 and 2018
respectively, increases were
“well above” the current
consumer price index, she
added. “And if the total cost
to company is taken into
account – which includes
additional allowances and
benefits also determined by
the NBCRFLI – the actual
prescribed minimum cost
to operators who fall under
the NBCRFLI are even
higher.”
The as-yet unanswered
question is how it will
impact sectors that are
paying above the prescribed
national minimum wage.
“Since it is a minimum
wage, the sectors that pay
at higher rates will have to
continue to do so,” she said.
The National Employers’
Association, quoting
independent economic
impact studies, is
concerned that a national
minimum wage agreement
will put some jobs at risk –
a sentiment shared by the
RFA.
According to Brown-
Engelbrecht, the problem
with the national minimum
wage – although admirably
geared towards eliminating
poverty – is that it doesn’t
seem to take into account
the different levels of
businesses, which could
impact the sustainability of
a small to medium business
and thus see more job
losses.
Furthermore, it fails to
recognise the requirements
of different jobs. “The
minimum rates as set by
bargaining councils at
least differentiate between
different types of jobs
and the skills and/or
qualifications required to
perform the job, thus the
need for setting minimums
for different job categories,”
commented Brown-
Engelbrecht.
She suggested that
perhaps the introduction
of a minimum wage could
be deployed in phases – or
staggered in terms of size
of business or number of
employees, over a period of
time – “to allow everyone
to get to the same starting
block” eventually.
Deputy president Cyril
Ramaphosa said businesses
that could not afford the
minimum wage would get a
chance to plead their case.
INSERT AND CAPTION
The unintended
consequence is that
a start-up business
with two or three
employees may face
closure.
Magretia Brown-
Engelbrecht
