The ACDP recognises the role that the National Minimum Wage can play in reducing poverty and inequality, and at the same time, encouraging growth in domestic demand and productivity in the economy.
It has been widely acknowledged as an important intervention to assist low paid workers, and if properly implemented, has the potential to lift the earnings of literally millions of low paid workers.
Fedusa’s Dennis George has said that it is ‘keenly aware that a R3,500 a month minimum wage is less than an ideal living wage, but will certainly lift an estimated 4.5 million workers currently earning below that amount out of abject poverty’.
It is disappointing therefore that the National Minimum Wage, which was negotiated at length between Nedlac partners, was not implemented by yesterday, 1 May.
The aim will be also to elevate the domestic worker and agricultural sectors to be on par with the National Minimum Wage, within 2 years of implementation of the Act, and after research by the Commission.
Managing productivity will be the responsibility of the employer and it will become more important to manage productivity properly as the cost of labour increases. Employers will also be able to apply for an exemption similar to the sectoral exemptions that can presently be applied for in terms of section 50 of the Basic Conditions of Employment Act. The Department of Labour is currently finalising an online system for employers to apply for such exemptions with an expedited turn-around time of 30 days of the consideration of such applications.
The ACDP questions how NGOs, particularly those NGOs performing state functions, will be dealt with by the Bill. The early childhood development sector is an example where NGOs receive a grant from the Department of Social Development to provide these services. In 2013 the average salary was R1,373. Without proper coordination across government and possible increases in these grants, these NGOs will be unable to pay their staff the minimum wage. Similar problems may arise for NGO healthcare workers.
The Shukumisa Coalition of NGOs working in the social care sector from supporting rape survivors to running domestic violence shelters and serving people with disabilities, similarly warned MPs during public hearings on the Bill of closures of services meant to protect the most vulnerable, including children and the youth. The ACDP trusts that concerns in this regard are being addressed.
The question also arises why the Expanded Public Works Programme (EPWP) has been included in Schedule 1 of the Bill. Workers enrolled in this programme are entitled to a minimum remuneration of R11 per hour. The EPWP has been identified as a flagship job creation and poverty alleviation initiative. The argument was that raising the wages of the EPWP would place too much strain on the national fiscus.
The ACDP believes that if widespread fraud and corruption in the public sector is addressed, this will unlock more resources.
We trust that the Commission will consider whether the EPWP should be excluded from the R20 per hour and what it would cost to achieve R20 per hour.
While there are some challenges with this Bill, they are not insurmountable and it is incumbent upon Parliament to pass it as quickly as possible.
SPEECH BY: STEVE SWART MP
NATIONAL ASSEMBLY DEBATE: Restoration of workers' right to dignity through the National Minimum Wage
2 May 2018
WATCH: Dignity through the National Minimum Wage