Sactwu said the second-year wage increase would be in line with the consumer price index (CPI) as at November 2018, plus an additional 1 percent. Photo: Irshaad Hoosain

CAPE TOWN – Members of the clothing industry in South Africa are set to receive an annual wage increase of not less than 7.5 percent this year and next year after wage negotiations for the sector were settled yesterday.

The Southern African Clothing and Textile Workers’ Union (Sactwu), an affiliate of Cosatu, said in a statement that clothing industry members in the metro areas of South Africa would receive a 7.5 percent wage increase and workers in the non-metro areas would receive an 8 percent package increase – of which 7.5 percent will go on wages and 0.5 percent to improve employer contributions to the provident fund.

Sactwu said the second-year wage increase would be in line with the consumer price index (CPI) as at November 2018,  plus an additional 1 percent. 

The union said in the event of CPI plus 1 percent resulting in the total labour cost increase being less than the rand value increase for 2018, the adjustment would be the rand value equivalent of the 2018 total labour cost increase. 

Sactwu general secretary Andre Kriel said: “This simply means that next year, our members will not receive a lower wage increase than what they will receive this year. Should the CPI plus 1 percent for the second year exceed this, negotiations will be re-opened.”

The wage settlement comes after three rounds of ordinary negotiations, the declaration of a dispute and two conciliation sessions to attempt a settlement of the dispute.

“The first conciliation session yielded a recommended settlement, which our members did not agree to, mainly due to disagreement about time-off organisational rights for shop stewards who are office-bearers of the union. It was only at the second conciliation session, last Thursday,  where progress was made,” Sactwu said. “The dispute was finally settled on Thursday, when a formal wage agreement was signed at the head office of the clothing industry bargaining council, in Cape Town.”

The agreement covers more than 60 000 clothing workers, employed in 745 factories nation-wide. The wage increase component alone, combined for all the workers, will mean a total cash amount injection of R250m into the domestic economy, over the next year.

The union said the effective and implementation date for the first year of the agreement was September 1, 2018, and for the second year, it would be September 1, 2019. Wage increases for this industry were normally due at the beginning of September each year.

Follow Business Report on Instagram here