South Africa: Wage Agreement Is 'Killing Jobs' in Cape Construction Sector


An agreement that pays above industry average wages is being strongly contested by small building companies and sub-contractors who argue that it is unaffordable and will put them out of business. Big players and trade unions want everyone to pay the same wages to ensure a 'level playing field'.

The minister of labour recently extended a collective bargaining agreement signed between employers and trade unions in the Western Cape's construction sector to all sub-contractors and other parties that were not signatories to the original agreement.

This binds these parties to the wage agreement that kicked in on November 1, 2019.

Small contractors and sub-contractors believe that the agreement discriminates against them, the non-parties, and if enforced, will accelerate the decline of the industry witnessed over the last 18 months.

At the very lowest pay grade, employers must pay R299.79 a day for a labourer. Of this, R240 is paid directly to the employee, while the employer pays the balance to the Building Industry Bargaining Council. The balance, R59.31 per day, covers pension contributions, sick pay, holiday pay, bonus pay, and the Building Industry Bargaining Council (BIBC) levy.

The employee is also expected to contribute R23.94 per day, which includes a...

See What Everyone is Watching

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.