Incentivise employers instead of fining them with amounts twice the value of the underpayment or twice the employee’s monthly wage, whichever is greater plus interest – Cofesa

Government needs to get the economy growing,  cancel the junk status credit rating and resolve state capturing before wage increases can be considered, says adv Hein van der Walt of Cofesa, the Confederation of Employers of South Africa.

Cofesa calls on government to celebrate the employers who still employ workers, incentivise them to retain jobs instead of issuing compliance orders and fining them with double the amounts of underpayment.

Government promote and subsidise jobs in some industries, they ignore the importance of the jobs that households and the agri industry create. It is time to value existing jobs in households, offices, farms and factories and to formulate incentives to sustain these jobs.

Wrong timing

With the down grading to junk credit rating and a growth rate of 0.6 per cent, Cofesa pleads for a moratorium on the increase wages until the economy recovers.

Increasing wages is out of sync with the call of the Minister of Finance, Mr Malusi Gigaba for everybody’s cooperation to make the economy grow. An increase of 17% in wage will increase unemployment, instability and misery.

When will government sent out a message that they value existing jobs that employers create and maintain under dire economic circumstances with rising food, electricity, fuel and other prices, unemployed relatives and caring for elderly family members?

Many employers say they will not be able to afford the proposed new minimum wages. Some say they are in financial distress and has for some time not received any wage increases themselves.

They say they will be forced to decrease the days on which their domestic and farm workers come to work. Some say they will be forced to do the household chores themselves and get contractors to come in once or twice a week to clean up.

Domestic and farm workers are the most vulnerable in the labour force and will be affected the most. In the Western Cape it will increase the misery where due to the drought 25 000 jobs were lost in the first quarter in agriculture alone.

Draconian compliance orders and double penalties

The BCEA Bill furthermore requires an employer who fails to pay an employee the national minimum wage to pay interest on any late payment calculated and for a fine to be imposed on employers for the non-compliance with the Act.

For the unemployed there is no hope for jobs in mining or in manufacturing where massive retrenchments took place over the last decade.

The proposed increase in minimum wages is at the wrong time and will be a further barrier for new entrants and the 27- 37% unemployed to enter the job market.

The NMW Bill, in its current form, specifies a national minimum wage of R20,00 for each ordinary hour worked. The NMW Bill further specifies that farm workers, domestic workers and workers employed on an expanded public works programme should be paid a minimum wage of R18,00, R15,00 and R11,00 per hour, respectively. Workers who have concluded learnership agreements will also be entitled to allowances, depending on their qualifications, ranging from R301,01 to R1 755,84 per week. The Act is proposed to commence on 1 May 2018.

In light of the BCEA Bill’s proposed amendments it is clear that an obligation will be placed on employers to comply with the proposed Act, when implemented, by the proposed monitoring and enforcement of the application of the Act by labour inspectors in regard to obtaining written undertakings from employers and by serving employers with compliance orders, and is further illustrated by the imposition of fines for non-compliance with the Act.

Furthermore, the national minimum wage is calculated as being the aforementioned amounts excluding any payment made to enable an employee to work including transport, equipment, food or accommodation allowance, any payment in kind, which includes board or accommodation, gratuities including bonuses, tips or gifts and any other prescribed category of payment.

Furthermore it would constitute an unfair labour practice where employers unilaterally alter hours of work or other conditions of employment when the national minimum wage is implemented.

The NMW Bill empowers the Minister, on application by an employer, to grant exemptions for payment of the national minimum wage in certain circumstances. The exemption granted must specify the period for which it is granted, which may not be longer than a year, it must specify the wage that the employer is required to pay its employees and any other relevant condition. This may offer some relief to small employers that are genuinely unable to pay employees wages in line with the prescribed minimum.

This is burdensome and seldom succeeds, says Adv Hein van der Walt.