ANC gives itself five years to resolve minimum wage

A national minimum wage is being considered by government but Labour Minister, Mildred Oliphant says it will take at least five years to devise a plan. Image: GCIS

The proposal was outlined in the National Development Plan and the election manifesto of the African National Congress‚ Labour Minister Mildred Oliphant said on Tuesday (21 January) at the annual National Economic Development and Labour Council (Nedlac) conference on organised labour.

She said the ANC had given itself five years to give effect to its election manifesto promise to investigate the modality for introducing a national minimum wage as a mechanism to reduce income inequality.

"The department is of the view that minimum wages should increase to a level that addresses the challenge of poverty and that supports economic expansion‚" the minister said.

"Our legislative framework for minimum wage regulation is the Basic Conditions of Employment Act (BCEA).

"The BCEA adopts a sectoral approach to minimum wage regulation through the mechanism of sectoral determinations. An amendment to section 55 of the BCEA does make provision for the issuing of an 'umbrella' sectoral determination covering employees not covered by other sectoral determinations or by a bargaining council collective agreements.

"So‚ there may be ways in which a new minimum wage that has wide application could be introduced. The more difficult challenge will‚ of course‚ be to determine the level of a new minimum wage," she said.

Retirement savings needed

Oliphant said the department believed all sectoral determinations should include provision for retirement savings and would investigate what mechanisms were appropriate to give more low-income workers access to retirement savings.

Another challenge was to link wage growth and productivity growth and to ensure violence in public protests and industrial action was limited.

However‚ the minister said there were unlikely to be specific legal amendments such as the requirement for a strike ballot‚ but ways would have to be found to address violence during industrial action, adding that strong leadership was required.

She mooted the possibility of strengthening the process of dispute resolution by introducing new mechanisms such as compulsory or interest arbitration‚ which is used internationally‚ in countries such as Canada.

"Research internationally has shown that settlements reached after strikes are not very far from the settlement awarded through interest arbitration. Clearly‚ interest arbitration cannot be viewed as an alternative to a strike in SA‚ but it may have potential as a part of the collective bargaining process that can lead to speedy and less costly dispute resolution," she added.

In interest arbitration‚ issues not resolved in collective bargaining are presented to an independent arbitrator for final resolution.

Oliphant stressed that government was committed to a policy and legislative approach of regulated flexibility of the labour market that balanced the necessity for regulation with the need for flexibility and dismissed criticism by international bodies - such as credit rating agencies and the International Monetary Fund - that the labour market in SA was inflexible.