Circular Wages 2023
TO ALL EMPLOYERS AND EMPLOYEES IN THE ELECTRICAL CONTRACTING INDUSTRY
Circular: 10 February 2023
Dear Sir/ Madam
2023 MAIN AGREEMENT PUBLICATION, REALIGNMENT OF WAGE AREAS (WAGE TIERS), WAGE INCREASES AND WAGE DEDUCTIONS
NEW AGREEMENT AND EXTENSION OF THE CURRENT MAIN AGREEMENT
Please be advised that the parties to Council have negotiated and concluded a new 6 (six) year agreement. This agreement will replace the current agreement that expired on the 31st of January 2023. Once that new agreement is published it will replace all other agreements that is in effect on the date of publication. Due to the late publication of this new agreement, the Council has applied to have the agreement extended by a further 6 (six) months.
The Council has received confirmation that the current Main Collective Agreement has been extended for a period of six months as published in Government Gazette No. 47963. Therefore, current terms and conditions remain unchanged until the publication of the new agreement.
The parties have applied for the agreement to be published by the 1st March 2023. If the publication date is after the 1st of March, 2023, all increases will not be affected as the parties have made provision in the new agreement to accommodate late publication. Therefore, employees will not lose their earnings for the year. Should the late publication happen, the Council will issue a circular informing the industry of the applicable increases going forward.
The extended Agreement is binding on all employers and employees who are members of the employers’ organization and the trade union respectively, and in terms of Section 32(2) of the Labour Relations Act, 1995, the Minister extended the Agreement to be binding on all other employers and employees engaged in the electrical industry.
Please note that the employers’ organisation, ECA (SA), is recommending to all its members to apply the negotiated increases from the 1st of February 2023. The proposed increases are 8.8% on employees earning the minimum published wage rates as in the current Main Collective Agreement and 7.8% on employees earning above the published minimum wage rates. If you need assistance with this, please contact your local Council office or local ECA (SA) offices.
PLEASE NOTE THE FOLLOWING MAJOR AMMENDMENTS TO THE NEW AGREEMENT
REALIGNMENT OF WAGE AREAS
One of the major discussion points at this year’s wage negotiations was the reduction of the 15 national wage areas and it was agreed that the wages be demarcated into three (3) tiers nationally, based on Municipalities, District Municipalities, Local Municipalities, and towns falling within the scope of these municipalities.
“Tier” means:
| Tier 1 | Tier 2 | Tier 3 |
|---|---|---|
| Areas that have the highest paying minimum wages for every category of employment. | Minimum wages are based on 90% of the published wage rates for Tier 1. | Minimum wages are based on 80 % of the published wage rates for Tier 1. |
The areas falling under each Tier are attached to this circular and available on our website www.nbcei.co.za .
CATCH-UP ARRANGEMENT
Different areas would need to adjust their minimum wages at different percentage rates over time to achieve the new prescribed minimum wages.
In order to move towards the new minimum wages, the wages in any area that is required to be enhanced to reach the target minimum wage, will be adjusted by a maximum of a further 1.75% in any given year of the Collective Agreement until the target minimum wage in each tier has been achieved.
It is further noted that any employee who, at the time of publication of this Agreement, is already on a minimum rate (applicable to their area), the rate of increase will be that applicable to the current minimum wage but only for the first year of the Agreement.
No wage may be decreased.
WAGE INCREASES – TRANSITIONAL ARRANGEMENTS
The wage increases for 2023, as agreed by the parties, will be effective as from 01 March 2023 and will be increased in terms of the July 2022 CPI as follows:
- All employees earning the prescribed minimum wages shall receive an increase no less than 8.8% (7.8%(CPI) + 1%).
- All other the employees earning in excess of the prescribed minimum wages shall receive an increase OF no less than 7.8%.
Scenario 1
Further to the above, the Parties acknowledge that commencing the Agreement on the 01 of March 2023 deprives the employees of one month’s increase in the new Collective Agreement cycle. To this end, the Parties have agreed that if the agreement is published with effect from 01 March 2023 firms will be required to pay an additional 0.7333% for each month in the first year of the published agreement.
For example, the CPI for July 2022 was 7.8%, therefore the wage increase for employees earning the minimum wage is 8.8% (July 2022 CPI was 7.8% + 1%), and the firm only increases the wages on the 01 of March 2023, then they would have to pay an additional 0.7333% (i.e. 8.8% /12 months) and therefore the employee would be entitled to 9.5333% wage increase for the first year of the published agreement.
OFFSET
The guaranteed minimum wage increases referred to above, shall be subject to the provision that any increases granted on or after 1 January 2023 may be off-set by the employer when calculating the guaranteed minimum increase.
DEDUCTIONS
With the publication of the new agreement, all Council and benefit fund contributions will be calculated based on the ACTUAL normal hours worked as declared by the employer.
To assist in calculating the deductions, Council will make available a “calculator” on the Council website (www.nbcei.co.za) to assist the employer in determining what deductions should be made for each fund for the employees’ wage and or salary.
ALLOWANCES INCREASES (ONLY EFFECTIVE FROM THE DATE OF PUBLICATION)
Transport Allowance
The transport allowance referred to in Part 2 of the Council’s agreement will from the date of publication of the
agreement (should be from 01 March 2023 or date of publication if later than 01 March 2023) be increased to R4.20
per kilometre.
Subsistence Allowance
The subsistence allowance referred to in Part 2 of the agreement (should be from 01 March 2023 or date of
publication if later than 01 March 2023) increase to R168.42 per day.
Stand by allowance
The stand-by allowance referred to in Part 2 of the agreement (should be from 01 March 2023 or date of publication if
later than 01 March 2023) increase to R110.43 per shift.
FOR AND ON BEHALF OF THE COUNCIL
Yours faithfully
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