Last week Friday (the 17th of November) the Minister of Labour published the National Minimum Wage Bill and its accompanying amendments to the Basic Conditions of Employment Act (BCEA). These Bills followed a somewhat a-typical route as it was preceded by years of negotiation at Nedlac between organized Business, Organised Labour and Government before final publication. The envisioned implementation date is the 1st of May 2018, which means that the Bill will likely be fast-tracked through Parliament and an unusually short period of time has been afforded for public comments, with the due date set at the 30th of November (a mere 2 weeks since publication).

The National Minimum Wage Bill seeks to introduce a single, unitary minimum wage for all sectors in South Africa. As it currently stands, the country has no universally applicable minimum wage but a handful of sectors, including agriculture, is governed by a sectoral determination in terms of the Basic Conditions of Employment Act. Sectoral determination 13 does not only govern wage levels in the agricultural sector, but critically regulates associated conditions of employment such as special conditions relating to working hours, amounts that may be deducted where food, electricity or housing is provided as well as the minimum standards for housing where a deduction is made. Sectoral determinations are subject to regular reviews by a tripartite body known as the Employment Conditions Commission.

Through a somewhat complicated legal arrangement, the National Minimum Wage and BCEA amendment Bill seeks to repeal and replace the sectoral determinations as far as the wage determination is concerned, however other aspects of the sectoral determination regulating employment conditions will be provisionally retained as a transitional provision. Likewise, the Employment Conditions Commission will be done away with and replaced by the proposed National Minimum Wage Commission.

Legal gymnastics aside, the de facto position that is proposed by these two Bill will be as follows: Subject to exceptions and special provisions, all sectors will be subject to the National Minimum Wage proposed at R20 per hour as of 1 May 2018. Agriculture is afforded a special dispensation in that it’s wage will be set at 90% of the National minimum wage for the first year of implementation, calculated as R18 per hour. Remuneration for all employees working less than 40 hours a week must be calculated per hour, provided that the minimum amount payable must be the equivalent of 4 hours per day as a sub minimum, even if the employee works less than that amount per day. Aside from the quantum of the remuneration, other conditions of employment will continue to be regulated by the Sectoral Determination until such time as it is repealed by the Minister. It remains to be seen to what extent the National Minimum Wage Commission will be able to consider the unique circumstances related to agriculture when undertaking its annual review for the economy as a whole.

The proposed dispensation is likely to have a substantial affect on primary agriculture and certain agribusinesses. As far as primary agriculture is concerned, labour intensive commodities will likely see labour increase as an input cost relative to other inputs. The majority of agribusinesses may be less effected than the primary sector as most employment opportunities necessitate skilled or semi-skilled staff that may already earn in excess of the proposed minimum wage. That being said, one cannot ignore the effects it may have on particular industries such as pack houses in the horticultural commodities.

Agbiz is busy preparing an input that focuses on the potential effect of the proposed dispensation on the agribusiness sector. Our inputs will also take cognisance of the BUSA position that is being devised on behalf of the business sector as a whole. After public submissions are received, the Bill is likely to be debated in the Portfolio Committee on Labour where additional inputs may be sought from the public.

Theo Boshoff (