Endorsement of the national minimum wage by the Congress of South African Trade Unions (Cosatu)

Business Unity South Africa (BUSA) welcomes COSATU’s endorsement of the compromise agreement reached on the National Minimum Wage and Labour Relations Package

- COSATU’s support marks the final endorsement of a labour relations stability and national minimum wage package that is set to change the tone of labour relations in SA

- The agreement sustainably addresses wage inequality, labour market stability and is a positive step towards meaningful economic transformation

Business Unity South Africa (BUSA) welcome COSATU’s Central Executive Committee (CEC) endorsement of the National Minimum Wage (NMW) and labour relations stability package, a compromise agreement entered into after extensive negotiations, by the leadership of labour, community, government and business under the auspices of the NEDLAC Committee of Principals.

“We are pleased with COSATU’s endorsement of the agreement. The agreement heralds a new era for labour relations in South Africa. With the backing of all social partners in NEDLAC, this agreement moves our labour market in the right direction. COSATU’s announcement has reaffirmed the commitment by social partners to fair labour practices and the important role of the private sector, as well as that of the State in creating the necessary conditions to drive productivity led, inclusive growth and employment,” says Tanya Cohen, CEO of BUSA.

“We commend COSATU, along with FEDUSA and NACTU and the Community Constituency in NEDLAC for their leadership and participation in the process and their support for the final agreement. We also appreciate the dedication and leadership provided by the Deputy President, together with the participating cabinet ministers and departments in government that have been part of the NEDLAC process. The NMW is an important step in the right direction towards a living wage, and sends a message that all the social partners, including business, are committed to creating a fair, inclusive and progressive economy. The agreement has been welcomed by the market and ratings agencies, as it addresses one of their key concerns, being labour market stability,” says Cohen

The agreement recognises that employees should be paid a fair minimum wage for productive work; that strikes should be peaceful and functional; that all stakeholders have a leadership role to play in bringing stability to the labour market and that productive employment (in businesses of all sizes and formats across different sectors) is essential for inclusive growth.

Jabu Mabuza, BUSA President welcomed the agreement indicating that: “The agreement demonstrates commitment by all the social partners in NEDLAC to transform the South African economy in a meaningful way that contributes to inclusive growth in the country. We congratulate Team SA on a job well done – as business we are committed to supporting and implementing the agreement.”

Notes to Editors:

National Minimum Wage (NMW)

One of the key provisions of the agreement is the introduction of a NMW of R20 per hour, which will come into effect on 1 May 2018. The NMW is introduced with the option of exemptions based on affordability and will be phased in for the first year, with domestic workers at 75% and agricultural workers at 90%. There is specific agreement that exemption processes will be streamlined and efficient, with a 30 day turnaround and particularly designed to enable smaller businesses to apply for exemptions without undue process burdens. A NMW Commission, will be established, which will determine annual escalations on an evidence basis. Adjustment criteria will include consideration of employment levels, GDP and productivity amongst other factors.

Labour relations and stability

The Accord provides a commitment by unions, employers and the State to promote labour relations peace and abide by a new Code of Good Practice on Collective Bargaining, Industrial Action and Picketing. The Code is intended to guide parties on good practice, to build capacity and shift the tone of labour relations to ensure that, where required, industrial action is peaceful and not prolonged.

Also included are Labour Relations Act amendments that embed the concept of secret balloting before strikes and advisory arbitration in the event that there is prolonged or violent strike action.

There is also a commitment to monitor and review the effectiveness of the Code and LRA amendments in NEDLAC to determine whether they are achieving the desired effect. 

Statement issued by BUSA, 3 March 2017