Ramaphosa signs minimum wage agreement of R20/h

R3 500 may not be a living wage, but it's a start, says Deputy President Cyril Ramaphosa. (Gallo)

R3 500 may not be a living wage, but it's a start, says Deputy President Cyril Ramaphosa. (Gallo)

Deputy President Cyril Ramaphosa has signed a national minimum wage agreement of R20 an hour. The agreement will come into effect on May 1 next year.

Ramaphosa made the announcement at Parliament on Wednesday, where he said that all stakeholders had signed the agreement except Cosatu, because the labour federation will need to report to its central executive committee (CEC) before they sign.

“Cosatu was not present to sign the agreement as they asked to get time to complete an internal process of consultation,” he said.

“The Cosatu president told me now that it needs to report to a CEC meeting in two weeks time.”

Ramaphosa has been working with Nedlac to negotiate a national minumum wage. The minimum wage will amount to R3 500 per month for a 40 hour week or R3 900 for a 45 hour week.
The deputy president acknowledged that R3 500 per month is not a living wage, but he said it would be the start of the process to pursue a living wage.

On Wednesday, Ramaphosa cautioned that businesses who can’t afford the minimum wage avoid retrenchment and apply for exemption instead. The national minmum wage agreement has come after two years of negotiations, where fears grew that retrenchments would follow if a national minimum wage was announced.

In November 2015, Labour Minister Mildred Oliphant told City Press that she was concerned “unemployment and retrenchment could go sky-high”. 

Dennis George, the secretary general of the Federation of Unions of South Africa (Fedusa), told Fin24 that there was also worry about bosses cutting the work hours of employees, but said that this will be addressed in legislation. 

“There were concerns around the R20 per hour salary as employers could try reduce hours,” he said.

“But we will put in a law that workers cannot be worse off.”

George went on to say that the national minimum wage agreement and its details would be mentioned in President Jacob Zuma’s State of the Nation address on Thursday.

Ramaphosa said that the agreement could uplift 6.6-million people in South Africa.

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