New labour fiat a knockout punch for restaurant and catering industry

20 January 2021

The Democratic Alliance (DA) condemns the decision by the Minister of Employment and Labour, Thulas Nxesi, to extend an agreement with the Bargaining Council for the Fast Food, Restaurant, Catering and Allied Trades to all employers and employees in the industry.

The extension of this agreement, and its enforcement, will deliver the death-blow to an industry that has been battered over the past year and is already on its knees.

The Minister’s extension of the collective bargaining agreement is irrational and ill-advised. It comes at the worst possible time. The coronavirus pandemic, the stringent lockdown regulations that have caused many small businesses to close, and the rolling blackouts that make it incredibly difficult for small-scale fast food outlets, restaurants, and caterers to operate, have all constituted a series of blows. Now Minister Nxesi has delivered a sucker punch.

In terms of the collective bargaining agreement  all employers in the fast-food, restaurant and catering industry will have to:

Implement a mandatory increase in hourly wages for various categories of workers and a 1.5% increase over and above inflation on those wages from 1 May 2021onwards.

Provide employees who work for 12 consecutive months with one week's wages as an annual bonus during December, and those working for 24 consecutive months or more with 2 weeks’ wages as a bonus.

Provide a stipend of R17.50 per week to employees if they are required to wash their own uniforms.

Pay various levies including a levy for ‘Council expenses’ (R5 per month per employee); a ‘general’ levy (R25 per month per restaurant); and a ‘dispute resolution levy’ (R3 a month per employee)

For many employers in the industry, this is simply unaffordable. Many of the fast food outlets, restaurants, and caterers that have remained open only barely survived the hard lockdown. The extension of this agreement may very well result in the complete closure of their businesses. Thousands of workers will lose their jobs as a consequence.

Minister Nxesi urgently needs to reconsider and revoke his latest fiat, lest he wants to become the Minister of Unemployment.

Issued by Michael Cardo, DA Shadow Minister for Employment and Labour, 20 January 2021