By Linden Bowes, ECA(SA) Regional Director, KwaZulu-Natal
Historically, South African Labour legislation was silent on the regulation of an employee’s work capacity, in relation to their earnings. Section 6(3) of the Basic Conditions of Employment Act makes provision to regulate and perhaps limit, an employee’s right to certain conditions of employment, where an employee earns above a determined earnings threshold.
Another historical gap under the milieu of our Labour Law, was the absence of a prescribed minimum wage, applicable to any workplace. Although many sectors and bargaining units in South Africa do regulate a prescribed minimum wage for certain occupational levels, it is evident that no such prescribed minimum wage, previously existed for general workers or workers who do not fall within a regulated sector or bargaining unit.
As per the National Minimum Wage Act 9 of 2018, government is empowered to publish prescribed minimum wage rates applicable to all employees, but excluding employees who are specifically governed under a Main Collective Agreement or a Sectoral Determination.
The National Earnings Threshold
The newly published earnings threshold from the Department of Employment and Labour, has a general impact on employers, as the earnings threshold applies to all industries. The new earnings threshold as from 01 March 2023, has increased and is applicable to employees earning a gross salary in excess of R241 110.59 per annum, where previously the earnings threshold for the period 03 February 2022 to 28 February 2023, was applicable to employees earning a gross salary of R224 080.48 per annum. The calculation of “earnings” means an employee’s regular annual remuneration before the deduction of income tax, pension fund contributions, medical aid contributions and similar payments, but excludes similar contributions made by the employer in respect of the employee.
For us, the above specifically applies to the electrical industry, when reading certain clauses from the Main Collective Agreement, such as:
- Clause 8 in relation to overtime
- Notwithstanding the provisions of sub-clause (2)(a) to (d) of this clause an employee earning in excess of the earnings threshold as published by the Minister of Labour in terms of Section 6(3) of the Basic Conditions of Employment Act, 1997 [Earnings Threshold Determination], as amended from time to time, shall not be entitled to be paid overtime unless mutually agreed to with his employer.
- Clause 32 in relation to fixed term contracts:
(2) This clause does not apply to:
(i) Employees earning more than the Earnings threshold as published by the Minister of Labour from time to time in terms of Section 6(3) of the Basic Conditions of Employment Act 75 of 1997 [Earnings Threshold Determination].
- Clause 41 in relation to Temporary Employment Services Provisions in Respect of Employees Earning Below the Earnings Threshold
- This section only applies to employees earning below the earnings threshold as published by the Minister of Labour from time to time in terms of Section 6(3) of the Basic Conditions of Employment Act, 75 of 1997 [Earnings Threshold Determination].
- For the purposes of this Agreement, an employee:
- Performing a temporary service as per the temporary service definition for the client is the employee of the temporary employment services; or
- Not performing such temporary service for the client is deemed to be the employee of that client and the client is deemed to be the employer; and subject to the justification provisions in Clause 40 and 41, employed on an indefinite basis by the client.
The National Minimum Wage
Although not wholly applicable to our industry, the newly published National Minimum Wage Act is available on the ECA website for employers who wish to monitor rates for staff who are not ‘employees’ as per the Main Agreement. Currently, an employee is now entitled to earn a minimum wage of R25,42 for each ordinary hour worked, which was previously R23.29 for each ordinary hour worked.
Similarly, farm workers are now entitled to a minimum wage of R25,42 per hour and domestic workers are entitled to a minimum wage of R25,42 per hour. Workers employed on an expanded public works programme are entitled to a minimum wage of R13,97 per hour and workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998 (Act No. 97 of 1998) are entitled to the allowance referred to in Schedule 2.
The newly published earnings threshold and the national minimum wage rates, both have an overall impact on the electrical industry. Members are required to understand the applicability of the earnings threshold to matters arising from overtime claims; fixed term contracts; Temporary Employment Services Provisions and other conditions of employment.
Members who employ general workers, domestic workers or any employees who do not fall within the ambit of the National Bargaining Council for the Electrical Industry (SA) Main Collective Agreement, are to take cognisance of the prescribed minimum wage rates.