Business Eswatini Engages with ILO Wage Specialist on National Minimum Wage

Business Eswatini recently facilitated a consultation session for its members representing the diverse sectors of the economy aimed at evaluating the inception report on the feasibility of implementing a National Minimum Wage (NMW) in Eswatini.

This follows the imperative given by the BE Board of Directors, to prioritize the exploration of the most suitable indicators for establishing a national minimum wage which will be informed by a comprehensive assessment of various economic and market factors to ensure equitable outcomes for workers’ livelihood, enterprise sustainability and employment opportunities. 

The inception report was facilitated by the International Labour Organization (ILO) as part of its support for the implementation of the Eswatini Decent Work Program. The consultation was facilitated by ILO Wage Specialist Guillaume Delautre and Program Officer Sindile Moitse.

During the engagement, employers demonstrated their support for the concept of a NMW, emphasizing the importance of considering workers’ needs alongside factors such as economic development, productivity levels, and employment rates. They underscored the necessity of a balanced approach to ensure mutual benefits for both workers and businesses.

It is important to note that in December 2022 the Ministry of Labour and Social Security of Eswatini asked the ILO to research on the feasibility of setting a national minimum wage at a level that would prevent households suffering from severe food insecurity. The Labour Force Survey of 2021 and the Employment and Wages Survey of 2018 compiled by the Central Statistics Office of Eswatini suggested a minimum wage of E3500 for emaSwati to achieve this.

Information sourced from the ILO reveals that in 1970, the ILO adopted the Minimum Wage Fixing Convention, 1971 (No. 131). The Convention encourages Member States to establish a system that sets minimum wage levels that take into account the needs of workers and their families, as well as economic factors. By 2023, Convention No. 131 had been ratified by 54 member States, including Eswatini (then Swaziland) since 1981.

The report by the ILO however states Eswatini currently does not have a national minimum wage. Section 4 of the Wages Act N°16 of 1964 allows the Ministry of Labour to establish a Wages Advisory Board, which the Minister may then ask to investigate the wages and conditions of employment of employees in the country.

Eswatini’s current minimum wage system is among the most complex in Africa. At present, however, minimum wages are determined by wage councils for different sectors established in terms of section 6 of the same Act. Currently, there are 18 wage councils in the country. Each of the 18 wage orders sets minima for a set of different occupations. Some also set different wages for workers in different areas, in different sub-sectors, or with different working arrangements. As a result, Eswatini has different minimum wages set for nearly 500 different categories of workers.

The ILO in its report notes that setting a minimum wage rate is about finding the right balance. The ILO Minimum Wage Fixing Convention No.131 calls for setting a minimum wage by considering both the needs of workers and their families as well as economic factors.

BE’s discussions with the ILO Wage Specialist highlighted the importance of distinguishing between the definitions of a national minimum wage and a living wage, urging stakeholders to adopt policies that cater to the interests of all parties involved. Concerns were raised regarding the potential repercussions of imposing a minimum wage equivalent to a living wage, including increased operational costs, possible job cuts, and challenges in maintaining competitiveness within the market.

Additionally, there was a consensus on the importance of conducting a comprehensive stakeholder analysis, expanding beyond the traditional tripartite approach to include representatives from the informal sector, domestic workers, and civil society groups. Other concerns were enterprise productivity, with emphasis placed on government responsibility in social development programs aimed at alleviating poverty levels.

Employers stressed the need for reforms in social protection systems to complement the NMW. Recognizing the diversity across industries, employers advocated for a clear understanding of wage affordability based on various factors such as labour intensity and market conditions.

Furthermore, acknowledging the necessity of sector-specific and enterprise-level readiness, employers emphasized the importance of evaluating the potential impact of NMW on operations, reviewing existing policies and contracts, and equipping personnel with the requisite knowledge for effective implementation.

Ultimately, employers concluded that a structured approach could facilitate a successful transition to a fair and equitable minimum wage system, aligning with the overarching goal of ensuring sustainability and enhancing the quality of life for all stakeholders.

Share With Friends