It is distressing that the final steps towards legislating a minimum wage — this country’s most important labour law since the labour relations framework was designed in the ’90s — seem to have gone awry at the last minute.
While much of business at first balked at the idea, there is now consensus that a minimum wage of R20 an hour will be good for society and will lessen inequality. It is estimated that 6-million people could have their earnings lifted. And, says organised business, if the exemption process works well — which unfortunately is not a given — then job losses will be mitigated.
Business’s arrival at this point and the arrival of organised labour at a point at which the R20 rate was considered acceptable as a start came at the end of a torturous process of negotiation. At the end of two-and-a-half years, the National Economic Development and Labour Chamber (Nedlac) produced a report in which each decision had been negotiated. In other words, the report was the product of a thorough social compacting process.
One of the debates it lost in the process was the decision that an employee would be paid for a minimum of four hours even when they work for one, as it argued that this would have an employment dampening effect
But after Nedlac comes the parliamentary process. While this should have been the easier part of the negotiation, it has been surprisingly hard and contentious. First was the decision by the state law adviser to change crucial definitions when drafting the National Minimum Wage Bill. The definition of employee, as someone who works for another person or who assists in conducting the business of an employer, and that of a worker, any person who works for another or is entitled to any payment in money or in kind, had been extensively debated in Nedlac.
The point of the definition of worker was to ensure that people who aren’t employees in the legal sense of the word and who might be independent contractors or piece workers — who frequently are among the most vulnerable in the labour market — would also be covered by the minimum wage. But the state law adviser’s draft ignored this, making the bill applicable only to employees.
After that storm passed and the definition of worker was removed, others arose. Some in labour, including the South African Federation of Trade Unions (Saftu), are aggrieved at what they say is a watering down of victories that had been won in the negotiations. They complain particularly that having won in the agreement that "the value of the wage must be protected", the inclusion of other factors in determining future increases — such as growth and employment — has diluted this undertaking. Both the Department of Labour and business disagree, arguing that it was never imagined that the effect on employment would not be considered when it came to increases.
Saftu — which incidentally is not part of Nedlac, partly because it has been shut out by other federations — is now angry and violently disrupted a parliamentary portfolio meeting on Wednesday. Cosatu, however, has given the bill the go-ahead and says that legislation will never be "picture perfect".
Business also has grievances. One of the debates it lost in the process was the decision that an employee would be paid for a minimum of four hours even when they work for one, as it argued that this would have an employment dampening effect. Now, parliamentarians have added that requirement to those defined as workers too, making the bill much more rigid.
While no one party can ever be completely satisfied with a social compacting process, there is clearly a problem with the overlapping responsibilities of Nedlac and Parliament. It would seem absurd to argue that elected public representatives should not have the right and ability to modify bills that come to the legislature from Nedlac.
But equally if the social compacting process is to be a meaningful one, should MPs — who may be lobbied by sectional interests — be able to upset a carefully balanced outcome?
There is no easy answer, but a more interactive and co-operative relationship must be found if we are to do much more of the social compacting that all in society say they desire.