The National Minimum Wage Act 9 of 2018 (Act) came into effect on 1 January 2019, introducing a national minimum wage (NMW) of R20 an hour. To avoid disruption across the agricultural sector and anticipating challenges with compliance, the decision was taken to introduce a reduced NMW of R18 an hour for farmworkers, defined as those who are employed mainly or wholly in connection with farming or forestry activities.
Over time, there would be a gradual process of aligning the NMW for farmworkers with the overall NMW.
The impact of the NMW on rising input costs was identified as of great importance in deciding not only to recommend an increase in the NMW in 2021, but also the equalisation of the NMW for farmworkers is instructive. “This understanding is perhaps even more significant if one considers the disruptive impact the COVID-19 pandemic has had on the sector,” says Taryn York, Associate in the Employment Law Practice at Cliffe Dekker Hofmeyr.
On 1 March 2021, the NMW increased to R21,69 an hour and the decision was taken that this would also apply to farmworkers.
The equalisation of the NMW for farmworkers resulted in a significant increase of about 16%.
However, in terms of section 6 of the Act, the Commission is required to review the NMW annually and to make recommendations to the Minister of Employment and Labour regarding any proposed adjustment in the NMW. The Commission’s report must reflect any alternative views, including the views of the public.
In terms of the proposal made by the Commission for the 2021 adjustment, the majority of the commissioners recommended that the NMW be increased by 1,5% above inflation, as measured by the consumer price index (CPI), which would equate to about a 4,5% increase, and that the NMW for farmworkers be equalised.
This proposal was not supported by a minority of commissioners (comprised of organised business).
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