An Agreement on the Introduction of a National Minimum Wage (NMW) in South Africa has been signed by all parties involved (with the exception of Cosatu) following negotiations at Nedlac.

The most important points of the Agreement are as follows:

NMW set at R20.00 per hour to take effect from 1 May 2018.

All Sectoral Determinations, collective bargaining agreements and individual employment contracts to be aligned with NMW when implemented.

However, Agriculture and Forestry minimum wage at 1 May 2018 to be set at 90% of this amount (i.e. R18.00 per hour), rising to 100% of the NMW from 1 May 2019.

A code of good practice for collective bargaining, industrial action and picketing, as well as an accord on collective bargaining and industrial action will accompany the Agreement.

Employers can apply to the Department of Labour for an exemption. Such exemptions will only be granted if financial hardship can be substantiated, and will only be granted for a maximum of 12 months.

A National Minimum Wage Commission (NMWC) will be established to review the minimum wage adjustment every year.

Before the NMW Bill can become law it will have to follow due process. This includes the following: being drafted and Gazetted; going through the Parliamentary approval process; going through a public engagement process; and being subjected to a Socio-Economic Impact Assessment.

Meanwhile the new minimum wage for forestry workers in terms of the current Forestry Sectoral Determination will be increased by 8% to R 15.39 per hour (or R3 001.13 per month based on a 45 hour week). This comes into effect on 1st March 2017.

This will be increased by an amount based on CPI + 1% on 1st March 2018. Just two months later – on 1st May 2018 – the new NMW will kick in, with the minimum wage for Forestry set at R18 per hour.

According to FSA Operations Manager, Roger Godsmark, organised agriculture will be given an opportunity to comment on the Bill once it has been Gazetted for public comment.

He said FSA will be seeking clarity on a number of issue raised by the NMW, including the future of the Sectoral Wage Determination itself.