Documents handed out: Submission of a Legislative Proposal: Memorandum in terms of Rule 273 of the Rules of the National Assembly – Portfolio Committee on Labour [confidential – not available to public]; National Minimum Wage Bill Process
The Portfolio Committee on Labour called an early meeting, prior to the official return of Members to Parliament in 2019, to deal with a technical error that had been found in the National Minimum Wage Act after the Bill had been passed by Parliament.
The Chairperson explained that section 17 (4) in the National Minimum Wage Act had created a problem because the intended cross-reference had not been amended when amendments were made to add paragraphs to clause 4. The provision containing the cross-reference had been removed before the President had signed the Bill into law. The Chairperson thanked the Member who had discovered the error, although the Member was upset that the issue had not been dealt with at the time, pointing out the cost of bringing the Members and the Department to Parliament for a special meeting.
The Parliamentary Legal Advisor explained that the National Minimum Wage Bill had contained an error in section 17 (4) which incorrectly referred to cross-section 4 (6) when it should have referred to 4 (8). Section 17 (4) currently said that section 4 (6) took effect retrospectively from 1 May 2017. When the National Minimum Wage Bill [B21- 2017] was introduced, section 4 (6), had dealt with an unfair labour practice where an employer unilaterally changed certain conditions of employment to avoid paying the minimum wage. However, what transpired was that section 4 had been amended by the Portfolio Committee in the course of discussions and two subsections had been inserted, which resulted in the relevant section 4 (6) moving down to become 4 (8).
The section that had been omitted from the Act by the Presidency had intended to protect the workers by preventing employers from avoiding paying a minimum wage because they had changed conditions of employment once the Bill had been introduced into Parliament. The clause protecting workers was backdated to 1 May 2017. However, with the change in numbering in clause 4, the cross-reference in the Bill passed by Parliament stated that the minimum wage had to be back dated to 1 May 2017.
The Legal Advisor explained that, because the Act had already been promulgated, the only way was to correct the technical error was by way of an Amendment Bill: an Executive Bill, a Committee Bill, or a Private Member’s Bill. Legal Services suggested that a Committee Bill would be the fastest way to process a new Bill.
The Committee approved the tabling of a draft Bill and a memorandum to the Speaker of the House of Assembly requesting approval from the House to introduce the Bill. The Committee noted that the House would not sit until early February 2019. The Bill would then be advertised in the Government Gazette and media.
The Chairperson stressed that the National Minimum Wage Act was law. It had been law since 1 January 2019 and all provisions in the law were effective. He called on employers to pay the minimum wage. He called on the workers to ensure that they received at least the minimum wage and, if not, they were to report any malfeasance to the Department of Labour. He asked the Department to support the workers by ensuring the implementation of the Act. Those employers that were unable to comply with the minimum wage had to follow the process stipulated in the Act and comply to those conditions. The Committee was calling for strict compliance with the Act, both in the private and public sectors.
The Committee would monitor the situation in respect of payment of the minimum wage and the Department would send out its inspectors to monitor the situation.
The Chairperson welcomed everyone and complimented them on the new season. He hoped that Members had been re-charged for the last half-mile. Unfortunately, the Committee had had to start early because of time pressures so that when Parliament rose, the work would be complete. The reason for the meeting was the challenge that had arisen as a result of a mishap with the National Minimum Wage Act.
He noted that the National Minimum Wage Act had been approved by Parliament, signed by the President and proclaimed into law. However, there was a one difficulty and that was with section 17 (4) that had created a problem because the intended cross-reference had not been amended after amendments had been made to section 4. The provision containing the cross-reference, section 17 (4), had been removed before the President had signed the Bill into law. A correction now needed to be made to the Act. He hoped that the President would sign the Amendment once the parliamentary processes had been completed and so that section would be implemented. It was an important clause that could not be ignored.
The Chairperson appreciated the vigilance of Mr Bagraim for bringing the point to the attention of the Committee so that it could ensure that it was completely correct. It was important to indicate that the Committee had, nevertheless, achieved the milestone of a National Minimum Wage Act. He repeated that the Act would improve the incomes of more than six million workers in the country. Already, workers who were paid in the middle of the month, and had been earning below the minimum wage, should have seen an increase in their pay packets. The minimum wage applied to all sectors, even state organs that employed people, such as the security personnel where people were paid less than the minimum wage.
The Committee called on employers to adhere to the Act and on workers to report anyone who was paying below the minimum wage. The unions also had to ensure that workers were protected. The Department and the Commission for Conciliation, Mediation and Arbitration (CCMA) had been requested to be ready to assist in any cases where assistance might be needed. The same applied in cases that went to court. The CCMA had to assist. The legislation was not drafted simply for people to ignore it. There was a reason for implementing the legislation. Those employers who believed that they were not capable of paying the minimum wage could refer to the processes for exemptions in the Act. The Committee would, obviously, prefer that everyone paid the minimum wage.
The Chairperson welcomed Mr Thobile Lamaite, Director-General (DG), at the Department of Labour and his team. He also welcomed Mr Wilbur van Niekerk, Director: Legal Research, from the CCMA and the parliamentary Legal Advisor, Michael Prince, from the Parliamentary Legal Services, who would be the key person in dealing with the issue. He also welcomed members of the media who would communicate the proceedings.
Mr M Bagraim (DA) asked to make a comment. He stated that at the last meeting in December 2018, he had asked the Committee to debate the issue, but the Chairperson and Committee had not seen the need for debating the matter at that time. It had cost a considerable amount of money for the Committee to re-convene today. He appreciated the fact that the Department and the entire delegation were attending the meeting, but it was a huge expense, especially as the departmental delegation had been at the meeting in December. It was also expensive for those Members who had had to fly in.
Mr Bagraim wanted to put it on record that it was wrong that the matter had not been debated and agreed to at the time when the Committee had the opportunity to do so. However, he agreed that the current debate had to happen. He had written to the Presidency, as had the Department, asking the President not to promulgate that clause. Had the clause been included, unions would have demanded back pay because that would have been the law. His point was that even when people were keen to go on holiday, they had to debate matters fully.
He was very upset about the cost incurred because the Department could ill-afford the cost of flying everyone to Cape Town and he hoped that they had other work in Cape Town. There was no additional budget for the CCMA.
The Chairperson did not appreciate the finger pointing. He had hoped that Mr Bagraim would be progressive, and not finger point. There were certain things that he did not know. The House had rules and Mr Bagraim had been unaware of them at the time. At the time that he had asked for a debate, he had not known what the Committee now knew. He had not had a specific reason for the debate but just an issue. Mr Bagraim had to understand that there were specific processes and procedures that had to be followed.
The Chairperson explained that things could not just happen abruptly because someone had a feeling. He had had to speak to the House Chair of Committees, to the Department of Labour and Legal Services. Even if the Committee had debated the issue at the time, the Committee would still have been having the very same meeting because all the processes would have had to be followed before any decisions could have been made. There were many processes in Parliament and the work could not have been done at the time. Those processes had now been followed.
The Chairperson advised that Mr Bagraim had to acquaint himself with the processes of Parliament so that he did not make unfounded accusations. What was important at the time was to speak to the presidency through the Department to ensure that the particular section had not been proclaimed, which had been done and he was hearing for the first time that Mr Bagraim had also communicated with the Presidency. If one did not understand the processes, one would make unfounded accusations.
Briefing on the Technical Error by the Legal Advisor
Mr Michael Prince, Legal Advisor, explained that the National Minimum Wage Act contained an error in section 17.4 which incorrectly referred to cross-section 4 (6) when it should have been 4 (8). Section 17 (4) currently said that section 4.6 took effect retrospectively from 1 May 2017. When the National Minimum Wage Bill [B21- 2017] was introduced, section 4 (6) had dealt with an unfair labour practice where an employer unilaterally changed certain conditions of employment to avoid paying a minimum wage. However, what transpired was that section 4 had been amended by the Portfolio Committee and two subsections had been inserted, which resulted in section 4 (6) moving down to become 4 (8). However, the consequential amendment to the cross reference had not been effected in the Act.
The Legal Advisor explained that, because the Act had been promulgated, the only way to correct the technical error was by way of an Amendment Bill. There were a couple of options before the Committee: an Executive Bill which would follow the usual processes; Parliament could introduce a Committee Bill; or a Member could introduce a Private Member’s Bill. The Committee would have no control over an Executive Bill. Legal Services suggested a Committee Bill. It would be under the control of the Committee and would be the fastest way to amend the error. It would be a short Bill, containing only one clause which would refer to 4 (8) instead of 4 (6).
The Chairperson noted that the cross-reference had to be corrected. Instead of referring to 4 (6), it had to refer to 4 (8). There would be no debate on the substance of the clause itself as it had already been debated and approved. The Legal Advisor had recommended a Committee Bill because it could be started in the Parliament and the Committee could have control of the Bill.
Mr Bagraim appreciated the presentation by Mr Prince, and he agreed that that was the best way to go. A couple of questions flowed from the Legal Advisor’s input. Firstly, was the Committee sure that the Executive was not already putting something together? Secondly, he asked what sort of timing the Committee was looking at if it followed the Committee Bill route. Finally, on an existential level, he asked if it was even necessary to effect the change, considering that there was an Act. There was nothing wrong with the current legislation as the Presidency had left out the mistake, which had been wise.
Ms S van Schalkwyk (ANC) welcomed the briefing by Mr Prince. She did not want to respond to Mr Bagraim, but she believed that it was very necessary to make the change by following the highly recommended Committee Bill mechanism, which was the fastest mechanism. It was necessary to effect the change. It was not about her and the Chairperson, the Members, or even the Department. It was about the vulnerable people who had lost out. There had been a reason for that clause and that had been to protect the people who could be discriminated against. The Bill was fine as it was, but the additional clause had been about ensuring protection of those who could be discriminated against by a change of working conditions. She proposed that the Committee followed the Committee Bill route to develop an Amendment Act that would protect vulnerable people.
Ms L Theko (ANC) asked about the constitutionality of the process. On the matter of what type of Bill should be drafted, she proposed that the Committee draft a Committee Bill as the timeframe was very tight. The legislation was important to the people on the ground so that they could be paid correctly.
The Chairperson asked for a comment from the Department on the proposals made.
Mr Lamaite informed the Chairperson that, from the onset when the error had been picked up, the Department had got the sense that the Committee was keen to address the error and so the Department had not started any other processes and accepted the advice of the Legal Advisor.
The Chairperson noted that the Committee was on top of the matter
Mr W Madisha (Cope) stated that there was no problem. He agreed that the amendment had to be implemented as a matter of urgency for the workers to gain from the legislation.
The Chairperson was pleased to see that the meeting was moving towards consensus.
Response by Legal Advisor
The Legal Advisor assured the Committee on the constitutionality of the process. Section 73 (2) of the Constitution permitted the Committee to introduce legislation. The process would kick off with the Committee requesting approval from the House to introduce legislation. The House could agree, or refuse that permission. The process was that the Committee had to draft the Bill, and the Legal Services had taken the liberty of drafting a Bill should the Committee want to follow the Committee Bill process. The Bill had to be advertised, giving for three weeks for public comment, according to the applicable rule.
Once the comment period was over, the Committee would have to meet to process comments and make any changes necessary. He doubted that changes would be necessary because it was a technical amendment. The Bill would go to the House for a first reading, following which, certain processes would take place and then the Bill would go to the House for a second reading.
He explained to Mr Bagraim that there was an Act and the only way to amend an Act was by way of an Amendment Bill. Section 17 of the Act referred to 4.6, which dealt with the minimum wage that could not be waived. In the original Bill introduced by the Department, 4.6 had referred to unfair labour practice if an employer changed the conditions of employment. The Committee had approved that provision. The Committee needed an Amendment in order to correct the intention of the legislature at the time.
The Chairperson thanked the Legal Advisor for the clarification and stated that he had spoken to the Joint Tagging Mechanism (JTM) Committee and he had been told that it would have to be a Section 75 Bill, which forced the Committee to follow the processes for a Section 75 Bill.
The Chairperson accepted that the Department was happy for the Committee to go ahead and resolve the technical error. He put it to Members that the Committee resolve to correct the technical error through a Committee Bill.
Mr Bagraim stated that the message must go out that the Amendment Bill did not detract from the Act. The proposed Amendment Bill did not in any way detract from the R20 per hour. People were confused and thought that the Act was not ready for implementation because there was to be an Amendment. He had seen, that very morning, that the Department of Labour had placed an advertisement informing people that the Act had to be implemented. However, the advertisement stated that EPWP workers received R11 per hour. Government had already agreed to an increase for the EPWP workers. That needed to be corrected as EPWP workers had expressed concern that they would not receive their increase.
Mr Bagraim supported the proposed mechanism for introducing the Amendment Bill.
The Chairperson thanked Mr Bagraim for agreeing. Mr America also agreed to the proposed plan of action. He noted that Members had agreed to a Committee Bill and the meeting could move forward on that basis if ANC Members agreed.
Ms van Schalkwyk, speaking on behalf of the ANC Members, said that they all agreed with a Committee Bill and they were ready to receive the memorandum to the Speaker.
The Chairperson thanked Ms van Schalkwyk and agreed that the meeting could move forward to a discussion of the memorandum to the Speaker. He asked the Legal Advisor to brief the Committee on the memorandum.
Memorandum to the Speaker
Mr Prince explained that the memorandum was in accordance with Rule 273 of the National Assembly Rules. As per Rule 273 (1), the memorandum was a request for the Committee to the House to introduce legislation to amend the National Minimum Wage Act. It explained the particulars of the Bill, the background to the error and the object and purpose of the Bill. The aim of the Amendment Bill was to correct the consequential error in section 74 of the Act by means of a new subsection 74 which was contained in the proposed draft Bill.
The Chairperson asked the DG about financial implications for the State in respect of the Amendment Bill. Would there be any costs? He did not think that there would be because it was actually just part of the main Act.
The DG explained that the only costs would be for advertising the Bill and that was a parliamentary cost.
The Chairperson thanked him for the confirmation that there were no additional costs to be included in the memorandum. The intention of the memorandum was to request the House of Assembly to give approval to the introduction of a Committee Bill to amend the technical error.
Ms van Schalkwyk formally moved to adopt the memorandum.
Mr Madisha seconded the motion.
The Chairperson asked if there were any objections to the memorandum. There were none. The Chairperson signed the memorandum.
Advertising of the Bill
The Chairperson stressed that the National Minimum Wage Act was law. It had been law since 1 January 2019. All provisions in the law were effective. He called on employers to pay the minimum wage. He called on the workers to ensure that they received at least the minimum wage and, if not, they were to report any malfeasance to the Department of Labour. He asked the Department to support the workers by ensuring the implementation of the Act. Those employers that were unable to comply with the minimum wage had to follow the process stipulated in the Act and comply to those conditions. The Committee was calling for strict compliance with the Act both in the private and public sectors. Employers should not ignore the law. He did not want to see long court cases.
The Committee would monitor the situation at the end of the month. Already those who were paid on the 15th of the month should have seen an improvement in their wages.
The Chairperson asked the Department to send out its inspectors to monitor the situation so that employers who did not comply would be exposed as being unpatriotic to the country.
He reminded the Committee that the process was to get approval by the House. He asked that the administrative services be given permission to send out the advertisement as soon as the House approved. There was no substance to be debated by the Committee. The Legal Advisor and Committee staff would arrange the advertisement and would provide the Committee with the programme for advertising as well as a copy of the advertisement. If the Committee agreed with that proposal, it would be fine.
The Chairperson asked the Legal Advisor where it would be advertised as there had been many complaints about the opportunity for public comments.
Mr Madisha noted that the Chairperson had put a question to the Committee, asking whether the Committee agreed that the administration should handle the process of advertising, etc. He agreed that the Committee should put the entire process in the hands of the Chairperson and the Legal Services and administration. The Chairperson would monitor the processes on behalf of the Committee to ensure that everything was properly done.
The Chairperson requested Members to give guidance to interested parties as to where they could find the advertisement.
The Legal Advisor stated that in terms of Rule 276 (4), the Bill had to be placed in the government gazette. He also recommended using Parliament’s website and direct distribution to interested parties. The Committee could also advertise in the newspapers.
The Chairperson suggested that the only mechanism where there was an option was whether the advertisement appeared in newspapers. He suggested that it had to appear in the main newspapers: two, three or four of them.
Ms van Schalkwyk agreed that the administrative staff should manage the administrative functions, with the Chairperson having oversight of the process.
Mr Bagraim suggested that the advertisement had to be published in the newspapers because of the past complaints from the public about the visibility of advertisements. He suggested that the advertisement also indicate that the Act had to be implemented with immediate effect.
The Chairperson stated that that would be conflating issues. The information regarding the implementation of the Act had been dealt with. The Department of Labour would ensure that that information was conveyed to all employers. He repeated the mechanisms of advertisement.
The Chairperson thanked the Members for their cooperation.
The meeting was adjourned.
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