Implementing wage increases

Companies that function within the jurisdiction of a Bargaining Council get into the rhythm of that Council in terms of implementing wage increases.

The Road Freight Industry increases usually happen on the 1st of March each year. The Clothing Manufacturing Bargaining Council’s increases are usually around September each year. Even the Sectoral Determinations for certain sectors get into a cycle. Farm worker wages are usually increased in March, Domestic workers’ wages are usually increased in December.

If you have done our Online Training, you would know that in the first module we explain the functions of a Bargaining Council. One of the things a Bargaining Council does, is to extend its agreement to non-parties. This means that when an agreement has been reached between the parties who negotiated it, the Bargaining Council applies to the Minister of Labour to then take those rules and make them applicable to the rest of the industry. In other words – apply those rules to the ones who were not part of the negotiations.

It sometimes happens – for many different reasons – that such agreements are not extended, or promulgated on time…

The consequence of this is that the Agreement is then not applicable to those who did not sign it.
It is not enforceable under the law and companies who are not party to the agreement do not have to abide by its rules. In the case of the implementation of wage increases it will inevitably cause uncertainty. This puts everyone in an awkward situation. One would think that it will be fine if everyone (for the sake of preventing labour unrest) would give the increases anyway while waiting for the minister to promulgate it.

This is however not the case.

In our experience working with the NBCRFLI (the Road Freight Bargaining Council), we have seen that if you increase an employee’s wages without the increase being promulgated or gazetted, the Council dismisses the increase altogether. Their system will force you to increase your employees’ wages AGAIN once the minister has promulgated the agreement.

So to follow the path of least resistance, we never implement increases to our clients’ payrolls unless the increases have been gazetted.

The Clothing Manufacturing Industry Bargaining Council has recently sent out a circular informing the industry of its new increases. Upon investigation we found that these increases have not been promulgated yet. We therefore refuse to increase the wages until they are published in a gazette.

Unfortunately with South African labour laws, this is often the effect – the rule / system is not flexible enough to adapt to the ever-changing circumstances of business. Until this changes, it is always easier to follow the path of least resistance in order to keep your focus on your business’ core function.

Have you received a compliance order from the NBCRFLI – then read on:

If you have recently received a compliance order from the National Bargaining Council for the Road Freight and Logistics Industry then you need to understand a few basic things:

  • Your problem is not going to go away. If you do nothing, the problem will in fact get bigger
  • You have 14 days to do something. Doing something means you either comply (i.e. PAY) or you dispute it

Let’s look at the following 2 options:

Doing nothing

If you do nothing, the agent who issued the compliance order will issue a certificate of outcome stating that the issue has not been resolved. This will get the wheels in motion for the matter to be referred to arbitration.

At arbitration, the arbitrator will then listen to the case and if you attend the arbitration, you can state your case. The Main Agreement stands, and if you have indeed not complied with any of the clauses, the arbitrator will take the compliance order amounts and issue an award against your company. This however is not the end of it.

The arbitrator now also has the authority to award interest and penalties and costs against you. Penalty costs can be up to 200% of the original capital amount owed. This is not funny at all. This is where you are going to wish you paid the compliance order when it landed on your desk.

Disputing the matter

If you choose to dispute the matter, there is really not much fighting to do. You can either prove that you are not liable to pay the funds / monies on the compliance order, or you can prove that you have already paid the funds / monies.

Of course proving that you have paid something means that you present a proper proof of payment.

If you need some guidance on this, then please contact us at Mediant Solutions

or if you want to DIY (do it yourself), then sign up for Module 3 of our online training here.

012 993 4509

What you need to know about contracts of employment

In South Africa, where labour laws are quite a handful and almost everybody needs a labour consultant to try and ensure they do things right, a contract of employment is something that you do not want to drop the ball with.

Here are some things we think your contract should have:

  • Full names and ID / Passport number of the employee, as well as contact number and address
  • Date of commencement of the contract
  • Position and obligations:
    • In this part of the contract, you need to specify what you are employing the person as and when you are governed by a Bargaining Council – you should most definitely refer to the definitions of their scheduled employees. (click here to look at our NBCRFLI-aligned contracts)
  • Probationary period:
    • This is probably the most overlooked schedule in the LRA (Schedule 8) that employers REALLY need to utilise in their contracts of employment. Instead of going the long route when you realise someone is not fit for your company – make use of the probation clause. The thing is that usually it goes both ways – the employee who doesn’t fit into your organisation also doesn’t want to be there. A probation clause saves both of you a lot of unnecessary stress.
  • Remuneration and deductions:
    • Here you need to specify what the salary / wage will be that the employee will get. Employers need to PLEASE stop promising a “nett salary of ___” it is almost impossible to achieve when taxes and UIF and levies starts to be included. The better practice is to state a package – basic salary of so much, travel allowance.. etc.
  • Working hours: this is a no-brainer, employees need to know what portions of their day they are selling to you for a salary 🙂
  • Leave:
    • It is important here to describe all the types of leave (click here for our article on annual leave) and how it works. Annual leave, sick leave, family responsibility leave, maternity leave etc. Refer to the Bargaining Council Collective Agreement where applicable and ensure that this is in line with their rules.
  • Company codes, rules and standards:
    • We find it is important to have a standard set of documents that contain the various policies and procedures at a workplace. Ensure that you do an induction for all new employees to introduce your workplace rules to everyone.
    • Do not add it into you contract of employment – but do make a very clear reference to every single policy or procedure document that you have (we have a few of these available in our HR Shop).
  • Termination:
    • The procedure to be followed and notice periods to be implemented need to be specified in your employment contract as well. Refer to the Bargaining Council rules here as well to ensure that everything is aligned to their rules.

(Should you be in the Road Freight and Logistics Industry – we have done all the work for you already!

Click here to access our online shop with all the different types of contracts and polices you could need.)