The national minimum wage: how best to align it with the existing labour regulatory framework

Authors Shane Godfrey, Mario Jacobs

ISSN: 2413-9874
Affiliations: Coordinator, Labour and Enterprise Policy Research Group, University of Cape Town; Researcher, Labour and Enterprise Policy Research Group, University of Cape Town
Source: Industrial Law Journal, Volume 39 Issue 1, 2018, p. 1 – 33


A national minimum wage (NMW) of R20 per hour will be introduced from 1 May 2018, which will set an absolute floor with which contracts of employment, collective agreements and sectoral determinations must comply. It will be introduced in a dedicated statute but will require alignment with or accommodation by existing labour statutes, in particular the Basic Conditions of Employment Act (BCEA), the Labour Relations Act, the Employment Equity Act, the Employment Services Act, and the Employment Tax Incentive Act. The article examines the potential points of conflict between the NMW and the above five statutes and discusses how these can be resolved. Key issues are whether the NMW should be introduced in a dedicated statute or via the BCEA as a sectoral determination; who will be covered by the NMW; what the impact will be on ordinary hours of work; what the composition of the NMW will be and whether deductions will be allowed; what will happen to sectoral determinations; who will grant exemptions and who will enforce the NMW; and how its impact on disproportionate vertical income differentials can be maximised. It is also argued that the NMW is of a different order to existing minimum wage setting mechanisms and will have a more extensive impact on existing legislation than anticipated. This raises the question whether it is time for an examination of the entire labour legislative framework.