The payment of responsible and fair wages is a topic that remains at the forefront of discussions globally. The International Labour Conference, with the participation of governments, employers, and employee delegates from the International Labour Organisation’s (ILO) member states, unanimously adopted a “Global Jobs Pact” in 2009. The Global Jobs Pact is a policy instrument by which members commit to the regular adjustment of wages, in consultation with the social partners, and is identified as one of the means of reducing inequality and contributing to economic stability as set out in the ILO’s Recovering from the crisis: A Global Jobs Pact. In line with the ILO’s commitment from member States, the SIZA Social Standard developed and aimed for South African circumstances is built on minimum labour legislative regulations and requirements as promulgated by the South African government. The Standard, along with its guidance notes as well as the accompanying third-party Audit Process and Methodology, is aimed at driving continuous improvement and a best practice approach, rather than being cemented as a minimum pass or fail rule.
As wages remain an important cornerstone of fair economic responsibility, the SIZA Social Standard encapsulates the importance of meeting the minimum wage requirements. Minimum wage is defined in chapter 1 of the ILO’s Minimum Wage Policy Guide as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”. In line with this requirement, the SIZA Social Standard embodies, as part of Code Requirement 22.214.171.124, the need to pay at least the legislated minimum wage rate to any and every employee. The Standard’s consecutive code requirements adopt the various legal regulations and global practice guidelines which ensure that wages are paid regularly and meet the relevant statutory requirements. As international labour standards do not set a particular means for calculating payment, the minimum wage paid should be adequate and should, as far as possible, take national practice and conditions into account. In its Minimum Wage Policy Guide, the ILO further advocates social dialogue, in particular collective bargaining, for determining wages at sector level, and multilateral consultations when setting minimum wages nationally.
As per chapter 3 of the ILO’s guidance, it is established that statutory minimum wages should be set by governments and as part of regulating its effectiveness, every effort should be made to ensure adequate consultation and direct participation by the relevant stakeholders and the public in the establishment and operation of effective minimum wage systems. South Africa has, in its drive toward more responsible wages, set a historic precedent with the proclamation of the 2018 National Minimum Wage Act, 2018. This Act inscribed the protection of low-earning and vulnerable workers in South Africa by providing a platform for reducing inequality and disparities in income in the national labour market. In line with its participatory approach, the National Wage Commission in South Africa reviews the national minimum wage and regularly makes recommendations on its adjustment, while ensuring a representative collaboration with independent experts, labour organisations, businesses, the community, and the general public prior to advising the Minister. The minimum wage for an agri-worker was R15,39 in 2017, but it has increased significantly with about 41% to a total of R21.69 from 1 March 2021. Despite agri-workers being paid according to a sectoral wage in the past, the National Wage Commission has established another first by ensuring that agri-workers receive the same minimum wage as the rest of South African citizens.
The cost of living is often a difficult concept to define and very hard to determine, especially within a country such as South Africa. As such, one needs to consider an abundance of factors, relevant to each sector, province, area, commodity etc. In determining the minimum wage in South Africa, and in considering the annual adjustment, the National Wage Commission considers the following factors:
- Inflation, the cost of living, and the need to retain the value of the minimum wage;
- gross domestic product;
- wage levels and collective bargaining outcomes;
- the ability of employers to carry on their businesses successfully;
- the operation of small, medium, or micro-enterprises and new enterprises; and
- the likely impact of the recommendation adjustment on employment or the creation of employment.
The need for a recognised living wage has also resulted in various discussions and workgroups aiming at finding a possible future resolution in reducing possible wage gaps. One such initiative, of which SIZA has been part of the working group, is the Floricultural Sustainability Initiative (FSI) together with the Sustainable Trade Initiative (IDH). SIZA is actively engaging with this process as there seems to be potential to implement strategies in the future whereby a matrix can be used to best determine the gaps in wages and adequately implement best practice solutions hereto.
The SIZA Social Standard continues to ensure that despite the method of payment, each and every employee will receive at least the national minimum wage. There are many businesses that exceed the minimum wage requirement and only implement it as a safety for the entrée level employee in their own drive toward providing a more productive and financially satisfied workforce, however, as the minimum measure, every SIZA member will be held accountable to abide by the national law, in line with global practice, ILO and UN conventions, and the SIZA Social Standard.