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Global employment briefing: South Africa, June 2018

  • United Kingdom
  • Employment law

12-06-2018

A new national minimum wage for South Africa

South Africa is now on the brink of implementing a national minimum wage. In March 2018 the Portfolio Committee on Labour invited public commentary on the National Minimum Wage Bill 2017 (“the NMWB”) and the Basic Conditions of Employment Amendment Bill 2017 (“the BCEB”) (“the Bills”). The Bills will significantly impact South African employment law once signed into law by the President, Cyril Ramaphosa. This is because presently there is no national minimum wage. There are, currently, only minimum wages applicable to specific sectors.

As part of a national strategy for socio-economic development in South Africa, the NMWB will implement a national minimum wage for those employees who earn low wages. There was much debate regarding the amount at which the national minimum wage will be set. It has been decided that the national minimum wage is to be set at R20.00 per ordinary hour worked for major sectors, alternatively, a monthly minimum wage of R3500.00. This is subject to certain exceptions where employees may earn less than the national minimum wage depending on the relevant sector in which they work, such as, the farming and domestic sectors.

Notably, the Bills have been developed in tandem and the BCEB will come into force immediately after the NMWB comes into effect. The BCEB will provide mechanisms for the enforcement of the NMWB. For example, should an employer fail to pay its employees the national minimum wage, the employer will be required to pay interest on that amount to them. The failure to do so may also give rise to legal proceedings being instituted against the employer. Furthermore, should an employer fail to comply with the national minimum wage, section 16 of the BCEB stipulates that a fine may be imposed upon the employer, which fine may be twice the value of the underpayment or twice the employee’s monthly wage, whichever is the greater amount.

It is important for potential investors to consider the Bills when investing in South Africa. Current or prospective businesses must make allowances in their budgets to ensure that they cater for the implementation of the national minimum wage. It is prudent to note that the Bills were passed by the National Assembly on Tuesday, 29 May 2018, and will be sent to the National Council of Provinces for concurrence before receiving the President’s signature to take effect. This provides an opportune moment for interested parties to ensure that appropriate measures are put in place so that they comply with the Bills when they are enacted in order to avoid incurring unnecessary penalties for non-compliance.

Employers need to be aware of the new Hate Speech Bill

Parliament has also been dealing indirectly with employment-related matters in terms of the Prevention and Combatting of Hate Crimes and Hate Speech Bill (“the Hate Speech Bill”) which was approved by Cabinet in March 2018. The Hate Speech Bill proposes to criminalise hate speech by imposing a sanction of three years imprisonment and a fine upon being found guilty for a first offence, and a sanction of five years imprisonment and a fine for a further offence. The Hate Speech Bill is relevant in the employment law context because employers must ensure that they educate their employees, who utilise the employer’s infrastructure and equipment particularly in social media usage, on the impact of the Bill. Such education is necessarily aimed at protecting employees and, consequently, protecting the employer from being brought into disrepute by its employees’ misconduct.

For more information contact:

Sandro Milo
Partner and Head of Employment Law
T: +27 (0) 87 358 9884

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