Restaurants successfully stop new wage rules

Restaurants halt new regulations around wage increases and other allowances.

In January, new regulations were gazetted for restaurants in South Africa. The new wage rules included compulsory pay hikes, end of year bonuses and weekly disbursements to clean uniforms.

Many restaurants opposed the timing of the collective agreement and industry bodies launched a legal bid against the new arrangement.

The collective agreement was initially signed into law by Labour Minister Thulas Nxesi in January and applies to almost all employers in the food service sector, except hotels and service stations. The agreement was finalised by the newly formed Bargaining Council for the Fast Food, Restaurant, Catering and Allied Trades.

On Tuesday 2 March, the Federated Hospitality Association of South Africa (Fedhasa), with backing from industry body Restaurant Collective, was granted an urgent interdict by the Labour Court. The court concluded that employers who were not part of the Bargaining Council for Fast Food, Restaurant, Catering and Allied Trades could not be compelled to abide by the collective agreement.

The sector was formerly regulated by the hospitality industry’s sectoral determination legislation, which has less rigid requirements. Collective agreements were only applicable to restaurants in Johannesburg and Pretoria as members of regional employer organisations. The new agreement, which is modelled on the one in Gauteng, was extended to employers nationwide.

Tuesday’s urgent interdict, which was granted without a challenge, means that restaurants won’t have to comply with the stringent new rules. The bargaining council, which initially said it would oppose the interdict, did not file opposing court papers.