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Business|Enterprise Policy Research Group|UCT|University Of Cape Town’s Labour|University Of Cape Town|Shane Godfrey
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Research group helps align minimum wage Bill with existing legislation

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Research group helps align minimum wage Bill with existing legislation

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19th February 2018

By: Thabi Madiba
Creamer Media Research Assistant and Reporter

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The University of Cape Town’s Labour and Enterprise Policy Research Group (LEP) has engaged in a study that could help align the proposed National Minimum Wage (NMW) Bill with existing labour legislation - the Basic Conditions of Employment Act (BCEA), the Labour Relations Act and the Employment Equity Act (EEA).

The NMW Bill aims to set a wage of at least R20 an hour for workers across all sectors of the economy, subject to lower wages in the domestic and farming sectors.

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UCT’s research provided the basis for comments on the NMW Bill and the Bill amending the BCEA.

LEP coordinator Dr Shane Godfrey said that it was difficult to understand why the Department of Labour (DoL) was so insistent on removing sectoral determinations from their policy tool-box.

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Sectoral determinations set minimum wages in specified sectors, as well as varying conditions in the BCEA to better match circumstances in sectors.

“The proposed National Minimum Wage Commission could easily take over the functions of the Employment Conditions Commission (ECC) with regards to sectoral determinations. Retaining provision for sectoral determinations to be issued and reviewed would allow the department to balance the absolute minimum remuneration provided by the NMW with higher wages in sectors where these are warranted and customised terms to match conditions in specified sectors,” he said.

Godfrey explained that one of the consequences of repealing the chapters dealing with sectoral determinations is that it removes an instrument that the DoL has in terms of section 27 of the EEA to address disproportionate income differentials.

Further, the DoL has not used the opportunity of the amendment process to revisit section 27 of the EEA so that raising wages at the bottom of wage schedules through the NMW could be accompanied by narrowing the income differentials in the rest of the wage schedule.

“This issue was raised starkly by the change of definition of the term ‘worker’, which saw a wider definition that included independent contractors or own-account workers replaced by the current definition of employee in the BCEA which excludes independent contractors,” stated Godfrey.

The DoL subsequently stated that the change to the definition was an error and that the wider definition would stand.

The status of the negotiation process in the National Economic Development and Labour Council (Nedlac) regarding the three bills is another concern raised by LEP.

“. . .  the memoranda of objects to two of the bills point to a bigger problem, namely that what appeared to be negotiations in Nedlac were viewed by the department only as consultations with the organised business, labour and community sectors.”

Godfrey concluded that this approach is “surprising and sharply at odds with the DoL’s stated commitment to social dialogue”.

It represents a major shift from the status accorded to previous negotiation processes in Nedlac.

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