presented by jonathan goldbergweb.vdw.co.za/portals/12/documents/events/2017/conference... · •...

NATIONAL MINIMUM WAGE: RECOMMENDATIONS

Presented by Jonathan Goldberg

ABOUT OUR FACILITATOR

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JONATHAN GOLDBERG

QUALIFICATIONS MEMBERSHIPS

• B. Com degree (Bachelor on Commerce)

• SABPP Master HR Practitioner

• Patron South African Payroll Association

• LL.B (Baccalaureus Legum) degree

• BUSA• Tokiso Dispute Resolution

Panel

• Honours in Business Administration (HBA) degree (cum laude)

• CAPES

• Former Commissioner of the Commission for Conciliation, Mediation and Arbitration

• Masters in Business Administration (MBA) degree (cum laude)

• Border – Kei Chamber of Business

• Institute of Directors• 4MAT Instructional Design Training (Michigan University, USA)

• Employment Conditions Commissioner

• Chartered Director (SA) Institute of Directors

• World Presidents International Organisation

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JONATHAN GOLDBERG

LECTURER AND SPEAKER PUBLICATIONS

• Stellenbosch Business School

• Co-author of four Broad-Based Black Economic Empowerment books

• Da Vinci Institute of Technology

• Written various articles on Labour Law for publications, including Business Day Law and Tax Review

• Wits Business School

• Fort Hare University

• Rhodes Investec Business School

• Local and International conferences and events

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JONATHAN GOLDBERG

REPRESENTATION ACCOLADES

• NEDLAC• 2016 Chartered Director of the Institute of

Directors (IOD)

• TOKISO Dispute Resolution Panel • 2012 Adcorp Chairman Award

• Former Commissioner of the Commission for Conciliation, Mediation and Arbitration

• 2012 Co-winner of the Business Person –Entrepreneur award: ABSA Jewish Awards

• Commissioner of the Employment Conditions Commission

• Federation of African Professional Staffing Organisations (APSO): Founders Cup Award

• National negotiator lead in numerous sectors

• 2009 Business Person of the Year (Business) –Border Kei Chamber of Commerce & Daily Dispatch

• Representation of business at numerous forums including the Labour Market

• 2009 Business of the Year Category C (turnover above 10 million) – Border Kei Chamber of Commerce and Daily Dispatch • Business representative on the

Employment Services Board

PANELS RECOMMENDATIONS

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National Minimum Wage

The NMW should be announced in

December 2016.

Legislative

The legislative and institutional

arrangements be finalised as early in 2017

as possible. At the latest these matters

should be dealt with before the end of

June 2017;

Compliance

Over the period 1 July 2017 – 30 June

2019, compliance with the NMW should be

based on the technical assistance and

persuasion, rather than penalties;

Enforcement

Beginning of July 2019 (2020 for small

businesses), enforcement of the NMW

should be based on the financial penalties

for non-compliance, and the Expert Panel

can consider implementing an adjustment

to the level.Recommended Level

The recommended level of R20 per hour

should be effective as soon as the

legislation is enacted – at latest 1 July

2017;

Panels Recommendations1. The Panel proposed that first national minimum wage for South Africa be set at R20 per hour. This is equivalent to approximately

R3500.00 per month on a 40 hours working week. 2. A critical issue that the Panel considered is the adjustment or transition period. The Panel suggests the following:

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Where are we in relation to Panel Recommendations on

the Amendments

1. LEVEL

The panel proposes that the first NMW for South Africa be set at R20/h. This is equivalent to approximately R3 500 a month on a 40 hour week.

Recommendationsand

Status

STATUS UPDATE

PANEL RECOMMENDATION

There is general consensus on R20 per hour as the National Minimum Wage from 1 May 2018. Negotiations are underway at Nedlac on the detail in this regard

Comment

That is 1 year 2 month early enforcement 1 May 2018.

Why have a panel of experts then?

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the Amendments

2. TIMING FOR LEGISLATIVE / INSTITUTIONAL ARRANGEMENTS

The panel recommended legislative and institutional arrangements be finalised early in 2017, but by the latest June 2017 and that R20 / hour should be effective at the latest by 1 July 2019.


Implementation should be as soon as possible and by no later than 1 May 2018.

Comment

See legislation prepared and proposed.

STATUS UPDATE

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the Amendments

3. ADJUSTMENT OR TRANSITION PERIOD

The panel proposed R20 / hour be introduced over a transition period with 1 July 2017 – 30 June 2019 being for compliance based on technical assistance and persuasion rather than penalties; and beginning of 1 July 2019 (2020 for small businesses) enforcement of the NMW should be based on financial penalties for non-compliance and the expert panel can consider implementing an adjustment to the level.

STATUS UPDATE


1 May 2018 enforcement date.

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the Amendments

Criteria to take into account the principles contained in the BCEA as well as international instruments from the ILO.

STATUS UPDATE

4. ADJUSTMENT CRITERIA

The panel set out a range of factors that are considered by the BCEA and internationally considering social and economic criteria.


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the Amendments?

Further discussions and decisions are required from CoP.

Comment

Therefore a minimum of R80 a day no matter how many hours worked. COSATU

wants at least 6 which is R120 a day.

5. HOURS OF WORK

Panel recommended a minimum of 4 hours a day. COSATU want 5 hours. Still under negotiation


STATUS UPDATE

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01

02

02

03

Proof of consent by registered trade union

Union letter / sworn statement: Employees do not belong to union.

No consent = Proof of service on registered union and proof of reasonable steps to inform employers about application.

Reasons for not being able to comply.

Non-Compliance

No Consent

Union

Proof of Consent

Exemption Form: Proof of Consultation

Letter of approval with names and signatures of affected employees.

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01 02 03 04 05

Exemption Form: Financials

1Most recent Income

Statements & Balance sheets with comparative figures for 2

years2

Abridged financial information (Pro-forma)

4Number of hours worked per

day / week

5Project plan / projections

to meet the NMW

3Current Wage register

(Seasonal / permanent / contract).

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the Amendments

7. TIERING FOR VULNERABLE SECTORS

The panel recommends a longer phase-in for:

STATUS UPDATEPANEL RECOMMENDATION

✓ Agreement on the principle of tiering for domestic and agricultural workers.

✓ The CoP must still determine the percentage.✓ Legislative proposal is 90% for farmworkers and 80% for domestics.

FARM WORKERSYr 1, 90-% with further adjustments done on the basis of evidence.

DOMESTIC WORKERSYr 1, 75%, with further adjustments being done on the basis of evidence.

WELFARE SECTOR AND CARE WORKAn expert group should consider how to addresschallenges in this sector.

SO WHERE ARE WE NOW?

National Minimum Wage Bill

ANDProposed Amendments to BCEA

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Unfair labour practice to unilaterally alter hours or conditions in implementing the minimum wage.

No variation possible (by contact or collective agreement)

Workers entitled to at least the minimum wage

NMW as minimum floor for wages.

1. Nature of NMW

National Minimum Wage Bill, 2017

Proposed by the Department of Labour. Still at Nedlac.

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National Minimum Wage Bill, 2017 Proposed by the

Department of Labour. Still at Nedlac.

Minister may exclude other forms of payment by regulation.

Minimum wage does not include payment of allowances, payments in

kind, tips, bonuses, etc.

NMW amount payable for ordinary hours of work. If work is less than 4 hours,

worker must be paid for 4 hours.

This is different to the current Basic Conditions of Employment Act “includes …”

2. Calculation of the NMW

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Ten factors listed that

must be considered by

Commission when

reviewing the NMW.

Any reason for

disagreement with the

recommendations must be

included in the report of

the Commission.

Lesson: Employee must ensure that they prove the case that they have referred

National Minimum Wage Bill, 2017

Proposed by the Department of Labour. Still at Nedlac.

3. Annual adjustment of the NMW

NMW must be reviewed

annually by the

Commission and

recommendation made to

Minister of Labour.

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Commission appointed by Minister from

members nominated by business, labour.

Primary function of Commission is to review the NMW and to make recommendations annually for its adjustment

Commission will take over many

functions of repealed ECC

Establishment, functions and composition of

Commission provided for

NMW Bill, 2017 Cont.

4. NMW Commission

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Enforcement Process

Non-compliance with award = applicant to apply to CCMA to certify

award

Arbitration award includes: Monies owed to employee / penalties for not paying NMW / CCMA costs for taking case. Receipt of an arbitration award from the CCMA ordering any party to

pay the other sum of money

Inspector secures undertaking from employer willing to comply (14 days)

Non-compliance = CCMA referral for compliance order to be made

arbitration award.

Non-willing employers issued with compliance order (14 days)

Employee claimed permanent employment with client in terms

of section 198A

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CCMA to publish scale of fees

✓ The cost of CCMA to hear the case✓ The cost of the Sherriff enforcing

the award✓ Penalties and interest

PenaltiesPenalties for not paying the NMW and

for overtime worked:

An employer who fails to pay the NMW and for overtime worked must pay an

employee:

2 months wage; orIf it greater, double the hourly wage for

time and overtime worked.

Non-compliance with the NMW = Prohibition to conduct business with

any Government department for a period of at least 12 months.

EnforcementEnforcement by the sheriff; attachment and auction of goods to the monetary value of the award.

Penalties & Scale of Fees

01 03

02

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5.

The industries in which the largestproportions of all workers earn lowsalaries are, domestic work (where 91%of employees reportedly earn less thanR3,500pm), agriculture (85%),construction (55%), and trade (48%). Atthe other end of the scale, it is only inutilities (24%) and mining (18%) thatfewer than one in four workers earn lessthan R3,500pm.

4.

4.6 million people (35% of all employedpeople) earn less than R2,000pm; 5.5million (42%) earn less than R3,000: 6.2million (47%) earn less than R3,500 and6.7 million (51%) earn less thanR4,000.00

1.

The new NMW will govern the employment of all workers,

replacing all sectoral determinations and any collective

bargaining agreement that sets minimum wages below this figure.

3.

NMW Adjustment will be driven by a commission composed of experts on thelabour market and representatives of organized business and labour, whichwould consider various factors before making a proposal to Government onany adjustments that might be needed, with that recommendation beingimplemented only after the commission has had an opportunity to considerany comments from Government and make adjustments to is, if needed.

Summary

2.

That the NMW will remain at R3,500pm from 1 May 2018 until 2019, and that failure to comply

with it will be met with sanctions.

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Summary

6.2 million people – or 47% of all workers –

currently earn less than R3,500pm

Nearly 50% of employed people currently earn

less than R3,500pm with the figure rising to over

85% in both agriculture and domestic labour.

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Summary

Worker category –sectoral determination

Lowest sectoral determination wage (rands)

Highest sectoral determination wage (rands)

Mean wage (rands)

Median wage (rands)

Number of Workers% of TotalEmployees

Agriculture 2607 2607 2414 2175 668048 5.1

Forestry 2607 2607 2231 1585 38710 0.3

Domestic Workers 1813 2065 1671 1359 1131424 8.6

Private Security 2067 6155 3995 3137 523870 4.0

Wholesale and Retail

2154 6506 4558 3171 1382320 10.5

Taxi 2113 3021 3796 2823 253358 1.9

Hospitality 2761 3077 3935 2719 333656 2.5

Contract Cleaners 2844 3122 2938 2196 743723 5.7

Average / Total 2522 3624 3192 2396 2075109 38.6

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Proposed Content in Brief

Does the hourly / monthly value include benefits?

With the impending implementation of Minimum Wage in May 2018, there are still many questions on how this will really impact business.

Questions such as:

What happens with commission only employees?

How will employees who work longer than 40 hours a week be

affected?

How will this compress our existing pay scale?

THE END

Thank YOU

Questions | Answers

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