The National Minimum Wage Act 9 of 2018 was promulgated with the aim of advancing economic development and social justice by improving the wages of the lowest-paid workers and protecting workers from unreasonably low wages. To this end, the current minimum wage stands at R20.76 per hour regardless of whether a worker falls under a Bargaining Council, Sectoral Determination or not. All workers in South Africa must earn a minimum of R20.76 per hour.
A conflict has emerged in the way in which the Department of Employment and Labour and Bargaining Councils enforce compliance with the new minimum wage. Currently, most bargaining councils are empowered in terms of section 33 and 33A of the Labour Relations Act 55 of 1996 to enforce their collective agreements. Therefore, if workers are being underpaid, an agent of the Bargaining Council will serve a compliance order to the employer allowing for a period for the employer to comply. If there is no compliance, the matter will be set down before a Commissioner at the Bargaining Council to arbitrate the dispute. The Commissioner may, under these circumstances, make an award indicating that the employer will have to comply with the compliance order. During the arbitration, the employer will have an opportunity to provide evidence to dispute the compliance order.
The process is different when it comes to the Department of Employment and Labour. The Labour inspector will investigate and thereafter issue a compliance order also providing the employer with a period to comply with the minimum wage. If the employer does not comply the Department of Employment and Labour will apply to the CCMA to adjudicate on the compliance order during the “con/arb” process. The employer may object to the compliance order by referring a dispute to the CCMA. Alternatively, an inspector of the Department of Employment and Labour may seek to request a written undertaking from an employer in respect of the underpayments. If the employer does not comply with the written undertaking, the Department of Employment and Labour may apply to the CCMA to make the written undertaking an arbitration award which is enforceable.
The confusion is further compounded by the situation where the main collective agreements of Bargaining Councils have lapsed. We are currently faced with the situation where the Metal and Engineering Industry Bargaining Council and the Motor Industry Bargaining Council do not have valid main collective agreements. Some of our members have complained that they are being approached by the Bargaining Council agents and the Department of Employment and Labour inspectors to enforce compliance. In the absence of a binding main collective agreement, the Department of Employment and Labour will have the jurisdiction to issue a compliance order or seek a written undertaking when the main agreement of a Bargaining Council has expired.
Therefore, employers must be alive to the fact that the Department of Employment and Labour does have jurisdiction to issue a compliance order or to seek a written undertaking if you are registered with a bargaining council whose collective main agreement has lapsed. It will not be a defence to an employer to maintain that a company is registered with the bargaining council and therefore does not have to deal with the Department of Employment and Labour.
Article by: Shakti Jainarain
Senior Dispute Resolution Official – Durban