At a high level, the Act applies to all workers, and it defines:

• a worker as any person who works for another and who receives, or is entitled to receive, any payment for that work whether in money or in kind; and
• an employer as any person who is obliged to pay a worker for the work that the worker performs for them.

However, a person is excluded from the application of the Act if they are:

• a member of the South African National Defence Force, the National Intelligence Agency or the South African Secret Service; or
• a volunteer (namely, a person who performs work for another person but who does not receive, or is not entitled to receive, any remuneration for their services).

The NMW increased on 1 March 2025 to R28.79 for every ordinary hour worked.

What happens in the case of “piece work” or “casual work”?

The Basic Conditions of Employment Act 75 of 1997 (BCEA) provides that even where a worker works for less than four hours on any day, they must be paid for four hours’ work on that day if they earn below R254,371.67 annually (which is the current earnings threshold determined by the Minister of Employment and Labour).

The outcome in the CCMA arbitration in Siphokazi Mvambi and 4 Others v Crown Household (Pty) Ltd (GAEK10115-23) is a recent example of the consequences which an employer would face where the employer attempts to circumvent the Act and pay workers below the NMW.

In this matter, the workers referred a dispute to the CCMA for outstanding remuneration under their contracts of employment, the Act and the BCEA. The workers were employed as general workers by Crown Household on permanent contracts and earned a salary of R200 per day.

Until March 2021, the workers were paid in terms of the Act. However, from April 2021 onwards, the workers were informed that they would be paid in terms of a “box system”. This meant that the calculation of their earnings would be based on the number of boxes they processed each day and daily targets were set that the workers had to meet to earn their salary for the month. The working hours were from 07h00 to 16h30, Monday to Friday and some Saturdays, for which they were not paid. They would also at times be required to perform extra duties (such as cleaning and offloading trucks) that prevented them from reaching the daily targets set by the employer. The workers also did not have lunch or tea breaks provided for in their employment contracts. The employer also implemented an annual shutdown from 22 December to 10 January each year, which period would be regarded as annual leave despite workers not being remunerated for that period.

The CCMA Commissioner found that the employer failed to comply with the Act and the BCEA and ordered it to pay the applicants their outstanding statutory monies as calculated in terms of the arbitration award (award). The calculation of the amounts owing to the applicants included the remuneration that they did not receive for the annual shutdown period (i.e. their annual leave payments) and for working on Saturdays. The employer was ordered to pay R137,000 to the workers.

The employer sought to challenge the Award in the Labour Court on technical points and the matter was initially set down on the urgent roll but not heard by the court. Regrettably, the Labour Court did not get into the merits of the matter. The employer was also ordered to pay the costs of the urgent application. The Labour Court may, however, consider the merits of the matter in the fullness of time.

Key takeaways

Employers are reminded that prior to the 2024 Labour Appeal Court decision in Quantum Foods v Commissioner H Jacobs N.O. and Others [2024] 1 BLLR 32 (LAC), there was much uncertainty about what is included in the calculation of wages. The uncertainty related to whether a contractual bonus and retirement fund contribution were considered gratuities or fell within the exclusions contained in the Act. This confusion was clarified by the Labour Appeal Court, which also meant that “structuring” of the wage within legal parameters is possible.

The award in Crown Household on the other hand presents a cautionary tale for employers – that creative approaches to getting around the legal obligation to pay workers the NMW will not curry favour with the CCMA. It is therefore best to take advice on “structuring” a wage to determine its legal permissibility.