The setting of South Africa’s national minimum wage: an investigation into representative and participatory social dialogue

Andrews, Adriaan

Title: The setting of South Africa’s national minimum wage: an investigation into representative and participatory social dialogue
Creator: Andrews, Adriaan
Subject: Minimum wage -- South Africa
Subject: Wages -- South Africa
Subject: Labour relations -- South Africa
Date Issued: 2025-04
Date: 2025-04
Type: Master's theses
Type: text
Identifier: http://hdl.handle.net/10948/71959
Identifier: vital:79161
Description: In 1994, South Africa entered a new democratic era, culminating in the adoption of a new constitution in 1996. This constitution promotes representative and participatory democracy for all citizens. Through representative democracy, the electorate chooses political representatives to serve at local, provincial, and national levels. Participatory democracy, on the other hand, aims to involve citizens directly in decision-making processes that affect their lives, particularly in socio-economic matters (Finnemore & Koekemoer, 2018; Republic of South Africa, Public Participation Framework for the South African Legislative Sector, 2013). This research investigated representative and participatory democracy, social dialogue, and their application in developing the National Minimum Wage. The study explored the four institutions involved in the National Minimum Wage’s progression: the initiation at the National Economic Development and Labour Council where the actors went into negotiation; bargaining councils information sharing via roadshows conducted by the Department of Employment and Labour, discussions in both houses of Parliament, and the National Minimum Wage Commission, which oversees the maintenance and annual review of the wage rate. The primary objective of the study was to assess the extent to which the social dialogue principle of representation for all interested parties was upheld across these institutions. To achieve this, the research employed a qualitative approach, with exploratory and descriptive methods. Data was collected through semi-structured interviews with ten respondents, eight of whom were interviewed, while two provided written responses, and through secondary data, namely the parliamentary committee minutes from the National Assembly and the National Council of Provinces. The findings revealed significant shortcomings in representation at National Economic Development and Labour Council. Labour representation was dominated by three federations, Congress of South African Tade Unions, Federation of Unions of South Africa, and National Council of Trade Unions, leaving out trade unions unaffiliated with these federations and unorganised workers, including those in informal employment. Similarly, business representation was confined to a single confederation, Business Unity of South Africa, representing primarily large, organised businesses, with little to no input from small and medium-sized enterprises or informal employers. Government representation was limited to the national level, excluding local and provincial representatives and affected departments such as Tourism, Agriculture, Forestry and Fisheries, Small Business Development, and Women, Youth, and People with Disabilities. Community representation, which should have represented the voices of the unrepresented, only reflected a small fraction of the population. According to Treasury (2016) the negotiation process at National Economic Development and Labour Council was central to developing the Bill but excluded many affected and interested groups. During a deadlock in negotiations, then-Deputy President Cyril Ramaphosa introduced an advisory panel of external experts to facilitate progress. Meanwhile, the Department of Employment and Labour conducted roadshows, ostensibly to share information with bargaining councils. However, limited data makes it unclear whether these roadshows effectively reached unrepresented groups. In Parliament, the Bill underwent deliberation in both houses, where political representatives engaged in committee discussions. Public participation was facilitated through written and verbal submissions, with a total of 92 submissions received. However, these submissions predominantly came from well-resourced organisations, and organisations already represented at National Economic Development and Labour Council. Vulnerable, unorganised, and underrepresented groups remained largely excluded from the public participation process, which some political representatives noted as disproportionately favouring the elite. The Bill was finally debated in the National Assembly by political representatives and became an Act on the 29th of May 2018 (Parliamentary Monitoring Group, 2017). The National Minimum Wage Commission comprises members from labour, business, and the community, reflecting the representation structure of National Economic Development and Labour Council as outlined in its founding Act. However, the one key representation present at National Economic Development and Labour Council but absent from the Commission is government representation. Additionally, the Commission includes external experts appointed at the discretion of the Minister of Employment and Labour (Department of Employment and Labour, 2021; National Minimum Wage Act, 2023).Given the majority of the Commission's composition mirrors National Economic Development and Labour Council, it implies that the representation challenges identified at National Economic Development and Labour Council have also been carried over to the Commission. Furthermore, the Minister of Employment and Labour holds significant authority, as the Commission’s role is limited to providing recommendations, with the final decision-making power resting with the Minister. What remains unclear is whether the Minister consults with other ministers from affected departments before making decisions based on the Commission’s recommendations regarding the minimum wage (National Minimum Wage Act, 2023). Furthermore, the research also explored satisfaction levels among National Economic Development and Labour Council respondents regarding the Bill that proceeded to Parliament. While respondents expressed general satisfaction, it is notable that labour representatives at National Economic Development and Labour Council made additional submissions in Parliament, suggesting that they were not entirely satisfied with the Bill in its original form that left National Economic Development and Labour Council. Given the representation and participation challenges identified throughout the process, the findings of this study reveal significant gaps in opportunities for all parties affected by the introduction of a national minimum wage to contribute meaningfully to the negotiation processes at National Economic Development and Labour Council, consultations within parliamentary portfolio committees, roadshows by the Department of Employment and Labour, and the annual review conducted by the National Minimum Wage Commission. To address these gaps, the researcher recommends that the National Economic Development and Labour Council implement a standardized scoping mechanism to ensure the inclusion of all affected stakeholders before new legislation is discussed. Additionally, Parliament should consider adopting an integrated, cross-portfolio approach to legislative development, while the National Minimum Wage Commission should expand the scope of its annual research on minimum wages. For the National Economic Development and Labour Council, the effective implementation of a more inclusive approach requires a robust and standardised mechanism for identifying and engaging all relevant stakeholders. In Parliament,portfolio committees could enhance accessibility by establishing more inclusive platforms for public participation. To strengthen the National Minimum Wage Commission’s annual review process, researchers could employ diverse methodologies to ensure a broader and more comprehensive assessment. Furthermore, all institutions involved should explore the role of digital and hybrid engagement platforms in enhancing participatory democracy. For future research, the study recommends establishing focus groups comprising individuals directly affected by the National Minimum Wage Bill. Additionally, further research should include case studies on the passage of other pieces of South African legislation to assess the extent and effectiveness of participatory democracy in legislative processes. Finally, the development of a more inclusive model for the National Economic Development and Labour Council, tailored to South Africa’s unique socio-economic structure, should be explored.
Description: Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Industrial Psychology and Human Resources, 2025
Format: computer
Format: online resource
Format: application/pdf
Format: 1 online resource (186 pages)
Format: pdf
Publisher: Nelson Mandela University
Publisher: Faculty of Business and Economic Sciences
Language: English
Rights: Nelson Mandela University
Rights: All Rights Reserved
Rights: Open Access

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