The signing into law of the National Minimum Wage (NMW) Bill is a positive step towards stabilising South Africa’s labour relations environment and signals the country’s commitment both to social reform and social compacting.


This is against the backdrop of South Africa’s labour relations environment having been previously constantly flagged by the three major sovereign credit ratings agencies – Moody’s Investors Service, Fitch and S&P Global Ratings – as a potential credit negative because of its volatile and adversarial nature. However, the negotiations around and subsequent agreement upon the NMW Bill and associated regulations shifted this narrative, with the process being cited by the three agencies as a positive framework for social reform.


Although S&P this week kept South Africa’s foreign and local currency denominated debt ratings at non-investment grade, the country’s outlook remains stable. S&P has noted the government’s commitments to undertake economic, social and fiscal reforms. The NWM Bill falls within the ambit of much needed social reforms. The coming together of social partners – business, organised labour, community and the government – demonstrates what can be achieved when the collective works towards a common social framework.


Business Unity South Africa (BUSA) is particularly pleased about the introduction of the new labour relations stability provisions: the default picketing rules, the secret strike ballots, the provision for extended dispute resolution prior to strike action and advisory arbitration. The organisation also notes the exemption provisions in the NMW laws, particularly targeted at SMEs, that will provide some relief for those employers that cannot afford the National Minimum Wage. This will need a well-capacitated Department of Labour to ensure the efficacy and correct application of the exemption provisions.


The labour relations stability provisions strike a balance between ensuring accountability, while also guaranteeing the basic constitutional rights to strike, associate and pursue economic activity.


“The coming into fruition of the NMW Bill is a resounding nod to social compacting and reinforces its need in our country. Now, the hard work of ensuring that this framework will bring about meaningful change in the lives of millions of South African workers begins. We have travelled a long, hard road to get to this seminal juncture, and that is thanks to the goodwill shown by the social partners,” said BUSA President Sipho M Pityana.


“The new advisory arbitration provisions are a clear signal the Nedlac constituents agree that violent and protracted strike action is no longer regarded as acceptable. We are pleased that we were able to reach an agreed outcome on the National Minimum Wage and urge all businesses to put plans in place to ensure compliance or go about official channels to seek exemptions,” said BUSA CEO Tanya Cohen.


Labour Law Signals a New Era of Labour Stability, says BUSA

Business Unity South Africa’s (BUSA) has reaffirmed its support for the labour law amendments that were passed by the National Assembly on Tuesday. The Basic Conditions of Employment Amendment Bill, the Labour Relations Amendment Bill and the National Minimum Wage Bill are critical for fostering labour relations stability in South Africa and bridging the wage inequality gap in the country, said BUSA.


BUSA indicated that there are a number of welcome provisions in the Labour Relations Amendment Bill. The amendments will promote labour relations stability, ensuring the exercise of the Constitutional right to strike together with respect for the right to life and protection from personal harm, freedom of association and protection of property. The  amendments include: the introduction of default picketing rules that will apply to all industrial action; the explicit requirement to a secret strike ballot; and the introduction of advisory arbitration for violent or protracted strikes.


“As previously stated, BUSA strongly believes that the labour relations amendments have the potential to change the tone of labour relations in South Africa and contribute towards a mutually respectful, job rich, productive and competitive economy,” said BUSA CEO Tanya Cohen.


BUSA stated that with regard to the National Minimum Wage (NMW) that it will be important to carefully monitor the implementation to mitigate any negative impact on employment. BUSA indicated that the exemption system will be critical to enabling compliance and affordability. This is particularly important for smaller and start up businesses that might not afford the R20/hour rate, said BUSA. It is important that the National Minimum Wage Commission when considering adjustments to the NMW, will be required to specifically take into account: GDP, productivity, the impact on small business and employment, said BUSA.

BUSA welcomes COSATU’s endorsement of National Minimum Wage and Labour Relations Package

Business Unity South Africa (BUSA) welcomes COSATU’s Central Executive Committee (CEC) endorsement of the National Minimum Wage (NMW) and labour relations stability package agreed to by the leadership of labour, community, government and business under the auspices of the NEDLAC Committee of Principals.

“We are pleased with COSATU’s endorsement of the agreement. The agreement heralds a new era for labour relations in South Africa. With the backing of all social partners in NEDLAC, this agreement moves our labour market in the right direction. COSATU’s  announcement has reaffirmed the commitment by social partners to fair labour practices and the important role of the private sector, as well as that of the State in creating the necessary conditions to drive productivity led, inclusive growth and employment,” says Tanya Cohen, CEO of BUSA.

“We commend COSATU, along with FEDUSA and NACTU and the Community Constituency in NEDLAC for their leadership and participation in the process and their support for the final agreement. We also appreciate the dedication and leadership provided by the Deputy President, together with the participating cabinet ministers and departments in government that have been part of the NEDLAC process. The NMW is an important step in the right direction towards a living wage, and sends a message that all the social partners, including business, are committed to creating a fair, inclusive and progressive economy. The Agreement has been welcomed by the market and ratings agencies, as it addresses one of their key concerns, being labour market stability,” says Cohen

The Agreement recognises that employees should be paid a fair minimum wage for productive work; that strikes should be peaceful and functional; that all stakeholders have a leadership role to play in bringing stability to the labour market and that productive employment (in businesses of all sizes and formats across different sectors) is essential for inclusive growth.

Jabu Mabuza, BUSA President welcomed the agreement indicating that “The agreement demonstrates commitment by all the social partners in NEDLAC to transform the South African economy in a meaningful way that contributes to inclusive growth in the country. We congratulate Team SA on a job well done – as business we are committed to supporting and implementing the agreement.”