A hospitality sector alliance, spearheaded by FEDHASA (Federated Hospitality Association of South Africa), has launched an urgent interdict against the Department of Employment and Labour following the Collective Agreement for the Bargaining Council for Fast Food, Restaurant, Catering and Allied Trades: Extension to non-parties of the main collective agreement gazetted on 08 January 2021.
The new law, which came into effect from 18 January 2021, affects all restaurants and food service establishments outside of Gauteng. (Gauteng establishments are already bound by a similar set of rules.) This extends to tearooms, coffee shops, pubs, taverns, roadhouses, cafes, snack bars, fast food outlets, convenience stores, industrial and commercial caterers, function caterers, and others. It excludes establishments attached to hotels and service stations.
The legislation requires employers to pay wages that exceed the national minimum, as well as annual bonuses and a weekly stipend to staff who clean their own uniforms.
The legislation requires, among other things, these employers pay wages that exceed the national minimum, as well as annual bonuses and a weekly stipend to staff who clean their own uniforms. Both employers and employees must also contribute to provident funds and funeral policies, and pay levies to the Bargaining Council. A one-month period has been granted to register with the Council.
No industry consultation was made before the law came into effect. This is legally possible if the Bargaining Council represents the majority of employers and employees who will be affected by its collective agreement – in other words, 50% plus one. However, FEDHASA is contesting that the Bargaining Council has this representation.
Rosemary Anderson, National Chairperson FEDHASA, says, “While the hospitality industry supports the need for fair employee benefits, the agreement was extended without ascertaining the extent to which the listed parties to the current Collective Agreement truly represent the industry.”
“While the hospitality industry supports the need for fair employee benefits, the agreement was extended without ascertaining the extent to which the listed parties to the current Collective Agreement truly represent the industry.”
The Bargaining Council is largely represented by the Guardian Employers Organisation (GEO) and Catering, Restaurant and Tearoom Association (CATRA). Anderson notes in a Business Insider article that these organisations represent, at most, 5 000 members: “This would mean that the hospitality industry, which includes tearooms, taverns, pubs, restaurants, etcetera have only just over 10 000 employers, which we know is just not possible.”
FEDHASA has had “amicable and constructive” discussions with the Department of Employment and Labour. But as the new law has already come into effect, the Department has advised them that their only recourse is to take the matter to the courts.
“During these times of crisis, it would appear wasteful to indulge in any court actions that could preferably be sorted out by consultation, mediation and discussion. Since this is the only option available, a hospitality sector alliance, which includes FEDHASA, major restaurants, fast food brands and representatives from the tavern industry, among others, is reluctantly forced to explore its legal options immediately. We will continue to pursue constructive engagement with Government throughout the process,” says Anderson.
“NEASA believes the new regulations will add an additional cost of at least 16% to the overhead costs of employers, which for many is simply not sustainable.”
The timing of the new regulations has also come under criticism from bodies such as NEASA (National Employers Association of South Africa). It is widely known that the food service industry has been one of the worst affected by the lockdown restrictions, including curfews and intermittent bans on the sale of alcohol. Many establishments have been forced to lay-off staff and close, while Stats SA has reported the earnings of the food and beverage sector are down 36,3% in November 2020 compared with November 2019. NEASA believes the new regulations will add an additional cost of at least 16% (excluding additional on-costs) to the overhead costs of employers, which for many is simply not sustainable.