Labour secures pension and severance gains
· Citizen
Stringent labour law amendments that caused tension between the government and labour have been moderated to please workers – with additional provision that employers who make late pension payments to their pension funds would pay interest.
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The department of employment and labour is considering public views before finalising the previous agreements so that the legislation can go to parliament.
Previously, organised labour put pressure on the government and business not to compromise the workers’ gains in the Labour Relations Act and other legislation.
Labour law amendments protect workers
In terms of the labour amendment as agreed by social partners, employers would be required to comply with pension fund payments.
The payment process would be overseen by department’s labour inspectors.
Employers who make late payment of workers’ contributions to the pension fund would be required to pay interest.
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This was aimed at addressing concerns that some employers, particularly municipalities and private firms in the security industry, failed to pay over the pension contributions to their funds.
Recently, many workers who went to collect their pension money from funds were shocked to learn they had very little money because their employers had failed to pay over the funds.
National Treasury has also intervened and withheld the local governments’ equitable share from defaulting municipalities.
R182bn allocated from national government
Based on the 2026-27 national budget, municipalities are allocated R182.3 billion in direct transfers from national government.
Some municipalities could lose their share if Treasury implemented the decision.
The enforcement would strengthen the Conditions of Employment Act provisions compelling employers to pay their employees’ pension contributions.
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Also, a proposal that the national minimum wage should drop from R20 an hour and the exemption of small and medium enterprises (SMMEs) from several labour laws was dropped.
Also, a suggestion that SMMEs should be excluded from having to pay retrenchment packages if they had been operating for less than two years was challenged by labour.
The most significant achievement for employees is the increase of severance pay for workers losing their jobs, from one to two weeks per year of employment.
Cosatu hails revisions
In cases where employers had defaulted to pay monies due to employees, the Unemployment Insurance Fund would be used to plug the gap so that the affected workers were not left without income.
Trade union federation Cosatu claimed credit for the changes.
Cosatu spokesperson Matthew Parks said the proposals “would have fundamentally set workers’ rights back”.
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