Opening remarks by Deputy President Cyril Ramaphosa at workshop on International Minimum Wage Experiences: at Gallagher Estate, Midrand
It gives me great pleasure to welcome you all to this workshop.
A special welcome goes to those who have travelled considerable distance, at short notice, to share their experience of national minimum wage systems. We greatly appreciate the support that we have received from the International Labour Organisation in making this event possible.
This year, South Africa is commemorating the 60th anniversary of the Freedom Charter, which provides a compelling vision of new society in which all may thrive and prosper. It is therefore a matter of great significance that we stand poised to realise the call made in the Freedom Charter for a national minimum wage.
It is an indication of the progress we have made in the first two decades of democracy and a signal of our determination to address the inequalities that remain in our society.
As directed by President Jacob Zuma in the State of the Nation Address last year, we are leading a social dialogue under the auspices of NEDLAC to address wage inequality and labour instability.
The Labour Relations Indaba convened in November 2014, which brought together senior leaders from all the social partners, took up this challenge. For the first time in South Africa there is broad agreement on the need to introduce a national minimum wage.
Discussions on this issue have been taking place in the Minimum Wage Technical Task Team and, on the issue of labour stability, in the Labour Relations Technical Task Team. These discussions are being overseen by a Committee of Principals, chaired by the Deputy President, that brings together senior leaders from all social partners.
Today is an important step in the process of considering the modalities of a national minimum wage for South Africa. Today we have an opportunity to find out about what has happened in other countries where a national minimum wage has been introduced.
We will be able to engage on the challenges they faced, the debates they had, and the solutions they found.
Already much progress has been made by the task teams that have been meeting at NEDLAC.
There is in principle agreement that: "The national minimum wage shall be the legal floor for a defined period of time, guaranteed by law, below which no employee may be paid in South Africa.”
There is agreement that a national minimum wage will apply to all employees, both in the public and private sectors, unless provided for otherwise by an exclusion, phase-in or phase-out in an upfront agreement.
South Africa has a long tradition of collective bargaining, one that we do not want to undermine through the introduction of a national minimum wage. We also have a successful history of minimum wage regulation through sectoral determinations. We see no reason to abandon this wage regulating measure.
There is broad agreement on a number of important issues:
- Collective agreements, including bargaining council agreements, sectoral determinations and contracts of employment, may not make provision for a wage that is lower than the national minimum wage, but may only vary wages upwards.
- Depending on the minimum wage level, however, certain exceptions may be needed. Nevertheless, it is generally agreed that comprehensive coverage is desirable and that a patchwork approach should be avoided
- The body that will be responsible for determining a national minimum wage will be a body similar to the Employment Conditions Commission, which currently recommends minimum wages and conditions of employment on a sector basis to the Minister of Labour.
- The composition of the Employment Conditions Commission includes representatives of organised business and labour and independent experts. This composition provides a sound building block for a future body that will determine and periodically review a national minimum wage.
I understand that the NEDLAC task team will also be considering the resource and research capacity requirements of such a body and other aspects of its role and function.
There is still quite a lot of detailed work to be done.
The task team is therefore currently focused on finalising the definition of the national minimum wage.
It is considering whether the national minimum wage, in its application, will provide for sector-specific or business entity exclusions. It is looking at the appropriate legal and institutional arrangements and how to ensure compliance.
I am sure that there are many other issues that may still require consideration that will be highlighted during today's proceedings. A very important consideration will be the empirical evidence that is being gathered relating to minimum wages in South Africa and the possible effects of introducing a national minimum wage.
We will have to be very sensitive to the employment effects, in particular, of a national minimum wage. In this area, a careful consideration of the evidence that is being gathered through the various research initiatives will be extremely important.
In reaching this point in our deliberation over a national minimum wage, we are reminded again of the importance of social dialogue and the value of an institution like Nedlac. The debates around introducing a national minimum wage are complex.
In moving forward, we need to keep an open mind, to learn from other experiences and craft an approach that will be suitable to South Africa's social and economic conditions. Today and tomorrow we will have to engage in an accelerated learning experience to understand the challenges and opportunities that lie ahead.
We are honoured to have international guest speakers from Germany, Brazil, Malaysia and the United Kingdom share with us best practices:
We have ILO experts from Latin American countries to share experiences of Argentina, Chile, Costa Rica, Mexico and Uruguay; experts from Africa to share experiences of Kenya, Mauritius, Morocco and Cape Verde; experts from Asia to share experiences of China and India; and experts from Europe to share experiences of France and Turkey.
There is a wealth of knowledge, expertise and experience that we have been able to access.
We are certain that it will make our own deliberations much richer, more meaningful and far better informed.
We are involved in an historic endeavour. Not only are we called upon to give practical expression to one of the most important demands of the Freedom Charter.
We are also called upon to find an approach to a national minimum wage that significantly improves the lives of workers, that reduces inequality, that lifts people out of poverty, and that contributes to economic growth and job creation.
I thank you.
